Legislature(2017 - 2018)BUTROVICH 205

03/10/2017 03:30 PM RESOURCES

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Audio Topic
03:30:33 PM Start
03:31:05 PM Confirmation Hearings: Alaska Oil and Gas Conservation Commission (aogcc)
04:11:07 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ Consideration of Governor's Appointees: TELECONFERENCED
Alaska Oil and Gas Conservation Commission:
- Hollis French
- Dan Seamount
-- Public Testimony on Appointees --
+ Bills Previously Heard/Scheduled TELECONFERENCED
                    ALASKA STATE LEGISLATURE                                                                                  
              SENATE RESOURCES STANDING COMMITTEE                                                                             
                         March 10, 2017                                                                                         
                           3:30 p.m.                                                                                            
                                                                                                                                
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Senator Cathy Giessel, Chair                                                                                                    
Senator John Coghill, Vice Chair                                                                                                
Senator Natasha von Imhof                                                                                                       
Senator Shelley Hughes                                                                                                          
Senator Kevin Meyer                                                                                                             
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Senator Bert Stedman                                                                                                            
Senator Bill Wielechowski                                                                                                       
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
CONFIRMATION HEARINGS                                                                                                           
                                                                                                                                
ALASKA OIL AND GAS CONSERVATION COMMISSION (AOGCC)                                                                            
     Hollis French                                                                                                              
     Dan Seamount                                                                                                               
                                                                                                                                
     - CONFIRMATIONS ADVANCED                                                                                                   
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
No previous action to record                                                                                                    
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
HOLLIS FRENCH, appointee                                                                                                        
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Appointee to the Alaska Oil and Gas                                                                      
Conservation Commission (AOGCC).                                                                                                
                                                                                                                                
DAN SEAMOUNT, re-appointee                                                                                                      
Alaska Oil and Gas Conservation Commission (AOGCC)                                                                              
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Re-appointee to the Alaska Oil and Gas                                                                   
Conservation Commission (AOGCC).                                                                                                
                                                                                                                                
DAVE HANSON, representing himself                                                                                               
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Supported both  appointments of Dan Seamount                                                             
and  Hollis  French  to  the  Alaska  Oil  and  Gas  Conservation                                                               
Commission (AOGCC).                                                                                                             
                                                                                                                                
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
3:30:33 PM                                                                                                                    
CHAIR  CATHY   GIESSEL  called  the  Senate   Resources  Standing                                                             
Committee meeting  to order at 3:30  p.m. Present at the  call to                                                               
order  were  Senators  Coghill,  Hughes,  von  Imhof,  and  Chair                                                               
Giessel.                                                                                                                        
                                                                                                                                
^Confirmation   Hearings:  Alaska   Oil   and  Gas   Conservation                                                               
Commission (AOGCC)                                                                                                              
                     Confirmation Hearings:                                                                                 
       Alaska Oil and Gas Conservation Commission (AOGCC)                                                                   
                                                                                                                              
3:31:05 PM                                                                                                                  
CHAIR  GIESSEL  announced  the   confirmation  hearings  for  the                                                               
appointment  to the  Alaska Oil  and Gas  Conservation Commission                                                               
(AOGCC)   of  former   State  Senator   Hollis  French   and  the                                                               
reappointment of Dan  Seamount. She said the  (AOGCC) is Alaska's                                                               
gatekeeper   and   chief   regulator  of   Alaska's   hydrocarbon                                                               
resources.  They have  a constitutional  mandate to  maximize the                                                               
state's resources  for the maximum  benefit of its people.  It is                                                               
part  of the  hammers the  state has  in its  tool box  to insure                                                               
compliance with that mandate.                                                                                                   
                                                                                                                                
SENATOR MEYER joined the committee.                                                                                             
                                                                                                                                
CHAIR GIESSEL  continued that AOGCC  has three members:  one seat                                                               
for a  petroleum engineer,  one seat  for a  petroleum geologist,                                                               
and  one  seat for  a  public  member  that preferably  has  some                                                               
background  knowledge  of  the regulated  industry.  She  invited                                                               
former Senator  French to come  forward saying he was  well known                                                               
to this  committee. He would  be filling the public  member seat,                                                               
which until  he was appointed  on July  20, 2016, was  vacant for                                                               
over  a  year. That  vacant  seat  lead  to some  serious  quorum                                                               
issues, which this committee heard about during the last year.                                                                  
                                                                                                                                
3:32:29 PM                                                                                                                    
HOLLIS  FRENCH,  Appointee,  Alaska   Oil  and  Gas  Conservation                                                               
Commission, Anchorage,  Alaska, said  he would  take a  couple of                                                               
minutes to  tell them about  his oil field background  before the                                                               
committee discusses his  appointment. He moved to  Alaska in 1978                                                               
and  was hired  in 1979  as  a bull  cook  on an  oil rig,  Shell                                                               
Platform A,  in Cook  Inlet. He  worked there  for the  next five                                                               
years.  After  eight months  of  washing  pots  and pans  he  was                                                               
promoted to a roustabout. That  is pretty unusual, as most people                                                               
start as roustabout, but he had  to actually work his way up from                                                               
below that. As  a roustabout you chip paint, mop  floors, work on                                                               
the business  end of the crane;  you strap loads, load  the boat,                                                               
and unload the boat; you swing  a sledge hammer; you crawl in the                                                               
vessels  and do  whatever you  are told  to do.  He did  that for                                                               
eight months.                                                                                                                   
                                                                                                                                
In 1980, Shell Oil Company decided to  hire and train him to be a                                                               
utility man,  which is essentially  an operator in  training, and                                                               
eventually  he  became  a   production  operator.  Operators  are                                                               
responsible for  the flow  of oil  and gas out  of the  well, for                                                               
separating that  oil and gas,  and the  water, as well,  ship the                                                               
clean oil to  shore, reinject the gas for gas  lift, and reinject                                                               
the water for water flood.                                                                                                      
                                                                                                                                
He worked there  until 1984 when he was hired  by ARCO at Kuparuk                                                               
when it was still  a new field. SPF-2 had not  started up yet and                                                               
SPF-1 was in motion.  He was hired for SPF-2, but  put to work on                                                               
SPF-1 and after  that SPF-3. It was the second  largest oil field                                                               
in North American  at the time. ARCO was a  great company to work                                                               
for; they had a very aggressive  training program in place and he                                                               
was  moved  through all  the  positions  of  the plant  from  gas                                                               
handling to  oil separation.  They had a  water flood  system and                                                               
power  generation.  They had  a  topping  plant where  they  made                                                               
diesel, a waste injection plant,  and drill sites where the wells                                                               
were located. That  is probably the first time  he encountered an                                                               
Alaska Oil and Gas Conservation  Commission (AOGCC) employee, the                                                               
inspectors  who came  out to  make  sure that  their surface  and                                                               
subsurface safety  valves would  actuate when they  were required                                                               
to do so.                                                                                                                       
                                                                                                                                
Eventually  he landed  in the  board room,  which is  the control                                                               
room,  when  CPF-1 was  the  oil  movements coordinator  for  the                                                               
Kuparuk field.  So, he was  constantly in contact with  CPF-2 and                                                               
CPF-3, as  well as the  TransAlaska Pipeline System  (TAPS). When                                                               
TAPS had  a slowdown  he would slow  down their  production. Then                                                               
they built  two enormous  so-called divert  tanks, so  they could                                                               
keep  their flow  going 100  percent to  those divert  tanks when                                                               
TAPS had a slowdown and then once  TAPS was back up to speed they                                                               
could slip that oil back into  the line and keep their numbers up                                                               
as high as possible.                                                                                                            
                                                                                                                                
MR. FRENCH said the sole function  of a production operator is to                                                               
maximize production.  When the  bosses would  walk in  they would                                                               
look at  the board and the  lights and want to  see everything at                                                               
105 percent. That  was their goal and they did  a pretty good job                                                               
in producing  over 300,000 barrels  of oil  a day in  the Kuparuk                                                               
field.                                                                                                                          
                                                                                                                                
3:35:42 PM                                                                                                                    
Eventually, he decided  to take oil field earnings and  go to law                                                               
school, then went  into public service by  becoming a prosecuting                                                               
attorney. Then  he was elected  to the legislature. He  closed by                                                               
saying that  both of those jobs  made him realize that  he enjoys                                                               
public service. This  position on the AOGCC is  another aspect of                                                               
that  and it  feels  like  a good  fit  in  combination with  his                                                               
earlier  oil field  experience. He  likes the  job; it's  a small                                                               
agency, but for three members they do a lot of important work.                                                                  
                                                                                                                                
3:36:23 PM                                                                                                                    
CHAIR GIESSEL  drew members'  attention to  the fact  sheet about                                                               
the Alaska Oil and Gas  Conservation Commission (AOGCC). The last                                                               
sentence  after the  last  semicolon says,  "and  one member  who                                                               
shall  have  training  or  experience that  gives  the  person  a                                                               
fundamental  understanding of  the oil  and gas  industry in  the                                                               
state." The final caveat was added  to statute in 2004 or so when                                                               
the public member had no  experience in the industry. That proved                                                               
to be  a concern to  legislators. She appreciated  Senator French                                                               
elaborating on his  experience in the oil industry.  She noted he                                                               
had  already been  serving on  the  commission for  six or  seven                                                               
months.                                                                                                                         
                                                                                                                                
SENATOR COGHILL thanked Mr. French  for serving and added that is                                                               
a good fit for  him. He asked how he sees the  advocacy he had in                                                               
the legislature fit into his role as a commissioner.                                                                            
                                                                                                                                
3:38:41 PM                                                                                                                    
MR. FRENCH answered  that one of the benefits of  the job is that                                                               
it is strictly bound by statute:  the black and white laws passed                                                               
by this  legislature. The regulations that  have been promulgated                                                               
by  the agency  define  his job,  and  he spends  a  lot of  time                                                               
reading  them.  Some of  them  are  specific  and some  are  more                                                               
broadly philosophical, but those  are his "commandments." His job                                                               
through  the agency  is to  protect  the public  interest in  the                                                               
exploration and  development of Alaska's  valuable oil,  gas, and                                                               
geothermal  resources  through  the application  of  conservation                                                               
practices  that  are  designed to  ensure  the  greater  ultimate                                                               
recovery of  the resource  and to  protect health,  safety, fresh                                                               
ground waters,  and the  rights of every  owner to  extract their                                                               
share of the resource.                                                                                                          
                                                                                                                                
One of the things commissioners have  to keep in mind, Mr. French                                                               
said,  is that  they  can from  time-to-time adjudicate  disputes                                                               
between two oil companies who  have leases butting up against one                                                               
another. One of the more interesting  words he has come across in                                                               
the oil  and gas industry  is that  oil and gas  are "fugacious,"                                                               
which means  they move around  underground unpredictably.  It was                                                               
first used  in the 20s  and 30s to  describe oil and  gas helping                                                               
regulators  get  a  handle  on  this  unusual  property  of  this                                                               
material.  If  you think  of  a  lease  being  a square,  it  has                                                               
happened in the past that owners  of this lease would drill right                                                               
along the edge,  so they would be able to  extract not only their                                                               
oil and  gas, but the oil  and gas of  the guy next to  them. For                                                               
that reason  most oil  leases come  with spacing  requirements of                                                               
500 feet. The  real point is that they are  bound by statute that                                                               
confine them to their mission. There is no room outside of that.                                                                
                                                                                                                                
SENATOR  COGHILL  said because  of  the  work  he has  done  with                                                               
Senator French  he has  the greatest  confidence that  is exactly                                                               
where  he will  go. Water  management  is of  growing concern  in                                                               
Alaska, especially  with more lateral  drilling and  fracking and                                                               
he asked  how the  AOGCC looks  at that  element as  a management                                                               
issue.                                                                                                                          
                                                                                                                                
MR.  FRENCH replied  that the  AOGCC has  a small  but incredibly                                                               
talented engineering  staff that  makes sure  every well  bore is                                                               
well   engineered,  constructed,   and   tested  for   mechanical                                                               
integrity.  He said  part of  Senator Coghill's  concern probably                                                               
arises  from  the fracking  controversy.  They  take place  miles                                                               
underground and  in a  safe formation, but  all that  fluid comes                                                               
back to the  surface and must be disposed of  in a separate well.                                                               
Disposal has  been a  problem in other  states, because  of their                                                               
high-volume wells  with enormous amounts of  water being injected                                                               
in  single places.  It  can cause  some  small slippages.  Alaska                                                               
doesn't have  that problem; we  don't have the same  geology here                                                               
and we  don't have the same  number of wells to  handle the water                                                               
from. He  said Alaska  probably issues  fracking permits  "in the                                                               
dozens" every year,  whereas in North Dakota and Texas  it can be                                                               
in the  hundreds or  thousands of wells.  Alaska just  hasn't had                                                               
that enormous  volume of water  disposal to cause a  problem. Our                                                               
disposal  wells  are  well   engineered,  tested  for  mechanical                                                               
integrity, and  are putting the water  so deep in the  earth that                                                               
it's never going to flow back up to a fresh water source.                                                                       
                                                                                                                                
SENATOR COGHILL  said he  appreciated that and  that he  wants to                                                               
stay ahead of any disinformation  that might come through Alaska.                                                               
He asked how many staff the AOGCC has.                                                                                          
                                                                                                                                
MR.  FRENCH  answered that  the  agency  has about  30  employees                                                               
total: three  commissioners, about six engineers  and geologists,                                                               
eight field inspectors  who work North Slope-type  shifts to look                                                               
at  the wells  and valves,  a couple  of IT  people, and  support                                                               
staff.                                                                                                                          
                                                                                                                                
3:44:14 PM                                                                                                                    
SENATOR  COGHILL asked  how information  flows between  staff and                                                               
the commissioners.                                                                                                              
                                                                                                                                
MR. FRENCH  answered that Commissioner  Seamount has  worked many                                                               
years with  the agency  and has  seen many ups  and downs  in its                                                               
functioning,   but   he   credits  Commissioner   Foerster   with                                                               
establishing a "highly efficient  and low drama" work environment                                                               
that  is extremely  collaborative.  And then  there  are sort  of                                                               
senior  engineers  and  inspectors  who  can  provide  historical                                                               
perspective  for   guidance.  Sometimes  the   conversations  are                                                               
extremely technical  and way  over his head  and he  listens, and                                                               
gets  the picture.  But  he relies  on  his co-commissioners  and                                                               
staff  to  help  guide  him.  Sometimes it's  more  of  a  policy                                                               
question.                                                                                                                       
                                                                                                                                
For example,  they have out  for notice and comment  a regulation                                                               
that  would  help publicize  and  make  available to  the  public                                                               
fracking  permits when  they come  to the  agency 10  days before                                                               
they issue the permit. This  week they were inundated with people                                                               
who think  it should be a  30-day notice and comment  period. And                                                               
that is  a policy call they  will reach at some  point. He wasn't                                                               
sure what  the right answer  is between 10  and 30, but  they are                                                               
conscious of not  holding up industry. The reason  for picking 10                                                               
days is that is about how long  it takes to process a permit, and                                                               
they don't  want to be in  the position of saying  oh, you've got                                                               
to wait  another 10  days while  a few more  comments come  in on                                                               
your permit.                                                                                                                    
                                                                                                                                
MR. FRENCH explained  that he reviewed a  fracking permit earlier                                                               
in the week  that took about an hour. It  might take someone else                                                               
two hours  to review  it, but  after that,  you're going  to know                                                               
where it  is and have  an idea of what  is happening. If  you are                                                               
for  it, you  say  so. Probably  most of  the  comments would  be                                                               
against  it, and  that kind  of policy  call has  no exact  right                                                               
answer, but you can see how they are thinking.                                                                                  
                                                                                                                                
3:46:50 PM                                                                                                                    
CHAIR  GIESSEL  commented  that his  colleagues,  the  other  two                                                               
commissioners, speak very  highly of Mr. French's  work with them                                                               
over the past few months that he  has been a very quick study and                                                               
they  really enjoy  working with  him. That  gives her  a lot  of                                                               
comfort and gives him a lot of credibility in her eyes.                                                                         
                                                                                                                                
MR.  FRENCH said  he  appreciated  that. He  wanted  to close  by                                                               
making a couple of points. A  question came up earlier in a House                                                               
Resources Committee that  it shed light on  how commission works.                                                               
Before he came down  he got a list of all  the permits the Alaska                                                               
Oil and Gas Conservation Commission  (AOGCC) had granted since he                                                               
came  to work.  It  was  about 100  well  permits  and about  300                                                               
workover permits.  One of the  committee members said,  "Aha, but                                                               
how  many have  you  denied?" The  answer is  none,  and that  is                                                               
because  the  companies  that  work in  Alaska  know  what  their                                                               
business is  about. When they  fill all  the boxes in  the Alaska                                                               
Oil and  Gas Conservation Commission (AOGCC)  checklist, they are                                                               
issued a permit. It's not up  to his discretion. The statute says                                                               
they "shall"  issue a permit  if all  those steps are  done. They                                                               
would  be in  Superior Court  getting  their hands  slapped by  a                                                               
judge very soon after acting arbitrarily or capriciously.                                                                       
                                                                                                                                
Lastly,  Mr. French  said  that  he met  with  an executive  from                                                               
Hilcorp on  Wednesday who said  he could tell the  committee they                                                               
are supporting his confirmation.                                                                                                
                                                                                                                                
3:48:46 PM                                                                                                                    
CHAIR GIESSEL  asked him  to stay  and said  that she  would take                                                               
public  testimony after  they  hear  from Commissioner  Seamount.                                                               
Commissioner Seamount  had been  serving since  2000 when  he was                                                               
first appointed by Governor Tony  Knowles. He holds the geologist                                                               
seat on the  commission. He is a professional  geologist under AS                                                               
08.02.011  and  has  a  minimum   of  10  years  of  professional                                                               
experience in  the field  of petroleum  geology. She  invited him                                                               
forward.                                                                                                                        
                                                                                                                                
3:49:35 PM                                                                                                                    
DAN  SEAMOUNT,  re-appointee,  Alaska Oil  and  Gas  Conservation                                                               
Commission (AOGCC),  Anchorage, Alaska, said he  would respond to                                                               
any questions  or concerns  they had  about his  confirmation for                                                               
the third time to the  Alaska Oil and Gas Conservation Commission                                                               
(AOGCC).  He noted  his resume  in their  packets. First,  he had                                                               
been  commissioner  for  the  Alaska  Oil  and  Gas  Conservation                                                               
Commission (AOGCC) for  the past 17 years, which is  more than 30                                                               
percent of  the time the agency  has been in existence;  it beats                                                               
Tom  Marshall's record.  He explained  that Tom  Marshall is  why                                                               
Alaskans  all get  PFD  checks and  why it  has  Prudhoe Bay  and                                                               
Kuparuk. He is  the one who picked the land  for state selection;                                                               
it was  called Marshall's Folly at  the time. That is  why Alaska                                                               
has been rich and will be rich in the future.                                                                                   
                                                                                                                                
MR.  SEAMOUNT  said  the  normal  time  that  a  commissioner  is                                                               
commissioner  at  Alaska  Oil  and  Gas  Conservation  Commission                                                               
(AOGCC)  is 2-4  years and  he has  been there  17 years.  He has                                                               
worked  with 10  other AOGCC  commissioners and  represented five                                                               
governors with the Interstate Oil and Gas Compact Commission.                                                                   
                                                                                                                                
He  said he  found this  job  is very  exciting, challenging  and                                                               
fulfilling. And  he would like  to continue that for  another six                                                               
years with the  best staff he has ever worked  with. Every single                                                               
one of the 30-plus staff is doing his job.                                                                                      
                                                                                                                                
When Commissioner  French started,  it was his  job to  bring him                                                               
along, and  after a  few days he  found out that  he gets  it. He                                                               
doesn't  have to  train him  anymore. The  commission is  running                                                               
smoothly right now  with a full commission. He  has been involved                                                               
in  more than  124 public  hearings, issues  over 3,500  drilling                                                               
permits, 17,000 well work over  operations, and hundreds of major                                                               
decisions. Before  he showed  up, the  commission had  done maybe                                                               
five penalties,  but since he  has been  there they have  done 27                                                               
civil  penalties and  137 enforcement  actions. The  reason there                                                               
are  more  penalties  and enforcement  actions  now  are  because                                                               
Alaska has  a lot of  new operators.  They come from  other areas                                                               
and  Alaska  has  stringent  regulations  and  they  need  to  be                                                               
educated. The most important part  of educating them is when they                                                               
do violate a regulation or statute,  they tell them what they did                                                               
wrong and you  write out a plan  on how it's not  going to happen                                                               
again.  That is  more important  that  the dollar  amount of  the                                                               
fines.                                                                                                                          
                                                                                                                                
MR.  SEAMOUNT said  he is  surprised that  he is  still with  the                                                               
commission, but  new challenges  come along all  the time  and he                                                               
can never predict  what they are going to be.  It keeps his brain                                                               
from  atrophying.  While he  has  been  in  the industry  he  has                                                               
interacted  with government  agencies in  five states  on similar                                                               
issues the AOGCC addresses. He  has 25 years of Alaska experience                                                               
directly  related  to  the  oil   and  gas  industry.  He  worked                                                               
underground  operations  with   production,  drilling,  reservoir                                                               
engineers, for most of his  career, and these will all contribute                                                               
to helping do a good  job of promoting conservation and efficient                                                               
production of Alaska's oil and natural  gas. He also has 20 years                                                               
of  outside  experience  in  the  Rocky  Mountains,  Texas,  Mid-                                                               
continent, California, Kazakhstan, and Alaska.                                                                                  
                                                                                                                                
3:57:03 PM                                                                                                                    
He  said  Alaska has  20-plus  basins,  which  have oil  and  gas                                                               
potential, and  only two  basins are  producing now.  Twenty more                                                               
are left that  haven't even been touched. A  tremendous amount of                                                               
oil is  left and  announcements of  three major  discoveries; two                                                               
are discoveries  and a  third needs  to be  tested, but  it looks                                                               
pretty good,  too. It  makes him  think that  Alaska has  a great                                                               
future. He said it takes 11.5 years to get a new field going.                                                                   
                                                                                                                                
3:59:10 PM                                                                                                                    
SENATOR   COGHILL  asked   what  surprises   he  saw   coming  in                                                               
exploration  other than  explaining the  challenges of  Alaska to                                                               
the new players.                                                                                                                
                                                                                                                                
MR. SEAMOUNT  answered that the  explorers coming into  the state                                                               
are spending a  lot of money and hiring good  staff. AOGCC is not                                                               
a consulting  agency - they don't  tell them how to  drill or set                                                               
pipe - and very rarely denies  a permit, because when a permit is                                                               
submitted and Alaska Oil and  Gas Conservation Commission (AOGCC)                                                               
staff sees  it's not compliant they  tell the company to  go back                                                               
home and  make it compliant.  They go back  and forth so  that by                                                               
the  time  it  gets  to  the  commissioners  it's  almost  always                                                               
compliant.                                                                                                                      
                                                                                                                                
One new discovery in the Pikka  Unit has been sitting between the                                                               
two biggest oil fields in the  country for 60 years; no one found                                                               
it.  Alaska Oil  and  Gas Conservation  Commission (AOGCC)'s  own                                                               
geologists have mapped it and think it's bigger than announced.                                                                 
                                                                                                                                
SENATOR COGHILL  asked what some  of the new wrinkles  are coming                                                               
in  terms  of  new   technologies'  compatibility  with  existing                                                               
regulations.                                                                                                                    
                                                                                                                                
MR. SEAMOUNT  said technology is  moving so fast these  days that                                                               
it's hard  to predict  and their  regulations are  being modified                                                               
just to keep up with it. A lot  of new people are coming into the                                                               
state and  stirring up  the locals  especially with  the fracking                                                               
issue, which incidentally has been  around since 1947. He has had                                                               
hundreds  of wells  fracked and  never had  a problem  except one                                                               
time when  a high-pressure  hose got away  from them  and started                                                               
whipping around the  location. His assistant just  happened to be                                                               
a semi-professional tennis player and  was playing jump rope with                                                               
it.                                                                                                                             
                                                                                                                                
Some people come into the state  saying that fracking is going to                                                               
kill local  kids and all kinds  of bad outcomes, but  he responds                                                               
that it's his job to make sure that  what they do is safe. He has                                                               
asked for any  information they may have, but he  hasn't seen any                                                               
yet.                                                                                                                            
                                                                                                                                
4:03:31 PM                                                                                                                    
SENATOR  COGHILL commented  that the  depth and  coldness of  the                                                               
ground up there probably is helpful for fracking.                                                                               
                                                                                                                                
MR. SEAMONT said that was correct  and added that the North Slope                                                               
has  no  real  fresh  water  either,  because  it's  all  frozen.                                                               
Fracking up there is  not the issue it is down  south and not the                                                               
issue that the outsiders have stirred it up to be.                                                                              
                                                                                                                                
CHAIR  GIESSEL  remarked that  last  year  or so  the  commission                                                               
rewrote the fracking regulations.                                                                                               
                                                                                                                                
MR.  SEAMOUNT  said  that  happened  in 2014  and  now  some  new                                                               
regulations are coming up to make the process more transparent.                                                                 
                                                                                                                                
4:05:20 PM                                                                                                                    
CHAIR  GIESSEL asked  him if  the  leaking gas  pipeline in  Cook                                                               
Inlet falls under AOGCC jurisdiction.                                                                                           
                                                                                                                                
MR. SEAMOUNT  said the  quorum says it  does not,  because mainly                                                               
the gas has  already been bought and  paid for, and it  is now in                                                               
the hands  of the Department of  Environmental Conservation (DEC)                                                               
and the  Coast Guard. That  said, the  discussion was one  of the                                                               
questions with  differences among  the staff  in his  memory, and                                                               
there  was  discussion  of  bringing in  the  attorney  from  the                                                               
Department of Law (DOL).                                                                                                        
                                                                                                                                
CHAIR GIESSEL thanked him for  his service and finding no further                                                               
questions, opened public comment.                                                                                               
                                                                                                                                
4:06:38 PM                                                                                                                    
DAVE  HANSON, representing  himself, Anchorage,  Alaska, said  he                                                               
worked under  Governor Hammond in  charge of land  selections and                                                               
completed selections of 40 million  acres of state land. Later he                                                               
was  the state's  lobbyist  in Washington,  D.C.,  on the  Alaska                                                               
National Interest  Lands Conservation  Act (ANILCA). Some  of the                                                               
many public positions  he has held are serving for  four years as                                                               
vice  chair  of the  Alaska  Local  Boundary Commission,  another                                                               
quasi-judicial body, such as the  Oil and Gas Commission, and for                                                               
the past 20  years he has had his own  business providing neutral                                                               
public  hearing officer  facilitation  services to  controversial                                                               
projects  such as  the Juneau  road, the  bridge to  nowhere, the                                                               
Anchorage Coastal Trail, and the Cooper Landing Road. He shared                                                                 
the following three points:                                                                                                     
                                                                                                                                
     1. In  reference to comments  from Senator  Coghill and                                                                    
     Commissioner Seamount, he has  several friends who have                                                                    
     been  in  the  industry  as drillers  and  welders  and                                                                    
     worked both  in the Dakotas  and Alaska, and  they have                                                                    
     uniformly  said they  cannot  believe  how much  better                                                                    
     quality control  Alaska has and  how much  more serious                                                                    
     the industry is  about doing things right  here. And he                                                                    
     thinks  that   is  partially   a  compliment   to  this                                                                    
     commission.                                                                                                                
     2.  The AOGCC  has  a great  reputation and  integrity.                                                                    
     This  is  a  tribute   to  Commissioners  Foerster  and                                                                    
     Seamount. Commissioner  Seamount should, of  course, be                                                                    
     reconfirmed.                                                                                                               
     3. He  supports the confirmation of  Mr. French. Though                                                                    
     he doesn't  know him personally,  his background  of 12                                                                    
     years of working  in the oil industry,  being a trained                                                                    
     attorney,  working   through  the   attorney  general's                                                                    
     office,  and 12  years  in  the legislature  definitely                                                                    
     qualify him to meet  a fundamental understanding of the                                                                    
     oil  and gas  industry  in  the state.  He  also has  a                                                                    
     public reputation for a high  level of integrity. It is                                                                    
     fortunate that a person with  his skills background and                                                                    
     interest and concern for Alaska  is willing to serve in                                                                    
     this position.                                                                                                             
                                                                                                                                
CHAIR GIESSEL, finding no further comments, closed public                                                                       
testimony. Finding no further questions, she read the committee                                                                 
report as follows:                                                                                                              
                                                                                                                                
     In   accordance  with   AS  39.05.080,   the  Resources                                                                    
     Committee  reviewed the  following  and recommends  the                                                                    
     appointments  be  forwarded  to  a  joint  session  for                                                                    
     consideration:   Oil  and Gas  Conservation Commission:                                                                    
     Hollis French and Dan Seamount.                                                                                            
                                                                                                                                
     This does not  reflect an intent by any  of the members                                                                    
     to  vote  for  or   against  the  confirmation  of  the                                                                    
     individuals during any  further sessions. The committee                                                                    
     signed the committee report document.                                                                                      
                                                                                                                                
4:11:07 PM                                                                                                                    
CHAIR GIESSEL, finding no further business, adjourned the Senate                                                                
Resources Committee meeting at 4:11 p.m.                                                                                        

Document Name Date/Time Subjects
Agenda 3-10-17.pdf SRES 3/10/2017 3:30:00 PM
1. Oil & Gas Conservation Commission Fact Sheet.pdf SRES 3/10/2017 3:30:00 PM
AOGCC
2. AOGCC - Resume - Hollis French.pdf SRES 3/10/2017 3:30:00 PM
AOGCC
3. AOGCC - Resume - Dan Seamount.pdf SRES 3/10/2017 3:30:00 PM
AOGCC