Legislature(2017 - 2018)BUTROVICH 205

03/15/2017 03:30 PM RESOURCES

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Audio Topic
03:30:15 PM Start
03:31:00 PM Confirmation Hearings: Big Game Commercial Services Board
03:58:17 PM Confirmation Hearing: Commissioner, Department of Natural Resources
05:00:35 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ Consideration of Governor's Appointees: TELECONFERENCED
Big Game Commercial Services Board:
- Thomas Atkins
- Tom Sullivan
Commissioner, Department of Natural Resources:
- Andy Mack
-- Public Testimony on Appointees --
                    ALASKA STATE LEGISLATURE                                                                                  
              SENATE RESOURCES STANDING COMMITTEE                                                                             
                         March 15, 2017                                                                                         
                           3:30 p.m.                                                                                            
                                                                                                                                
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Senator Cathy Giessel, Chair                                                                                                    
Senator John Coghill, Vice Chair                                                                                                
Senator Bert Stedman                                                                                                            
Senator Shelley Hughes                                                                                                          
Senator Kevin Meyer                                                                                                             
Senator Bill Wielechowski                                                                                                       
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Senator Natasha von Imhof                                                                                                       
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
CONFIRMATION HEARINGS                                                                                                           
                                                                                                                                
Big Game Commercial Services Board                                                                                            
  Tom Sullivan - Anchorage                                                                                                      
  James Atkins - Anchorage                                                                                                      
                                                                                                                                
     - CONFIRMATIONS ADVANCED                                                                                                   
                                                                                                                                
Commissioner, Department Of Natural Resources                                                                                 
  Andy Mack                                                                                                                     
                                                                                                                                
     - CONFIRMATION ADVANCED                                                                                                    
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
No previous action to record                                                                                                    
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                              
TOM SULLIVAN, Appointee Anchorage, Alaska                                                                                       
POSITION STATEMENT: Testified as appointee to the Big Game                                                                  
Commercial Services Board.                                                                                                      
                                                                                                                                
JAMES ATKINS, representing himself                                                                                              
Anchorage, Alaska                                                                                                               
POSITION STATEMENT: Big Game Commercial Services Board.                                                                       
                                                                                                                                
ANDY MACK, Commissioner-designee                                                                                                
Department of Natural Resources (DNR)                                                                                           
Juneau, Alaska                                                                                                                  
POSITION   STATEMENT:   Provided   comments   on   becoming   DNR                                                             
Commissioner.                                                                                                                   
                                                                                                                                
WAYNE KUBAT, Vice President                                                                                                     
Alaska Hunters Association                                                                                                      
Wasilla, Alaska                                                                                                                 
POSITION STATEMENT:   Supported James Atkins'  appointment to the                                                             
Big Game Commercial Services Board.                                                                                             
                                                                                                                                
THOR STACY, lobbyist and Contract Director                                                                                      
Government Affairs                                                                                                              
Alaska Professional Hunters Association                                                                                         
Juneau, Alaska                                                                                                                  
POSITION  STATEMENT: Supported  Mr.  Atkins'  and Mr.  Sullivan's                                                             
appointments to the Big Game Commercial Services Board.                                                                         
                                                                                                                                
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
3:30:15 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  Stedman,  Coghill,  and   Chair  Giessel.                                                               
Senators Hughes and Meyer arrived shortly thereafter.                                                                           
                                                                                                                                
^Confirmation Hearings: Big Game Commercial Services Board                                                                      
   Confirmation Hearings: Big Game Commercial Services Board                                                                
                                                                                                                              
3:31:00 PM                                                                                                                  
CHAIR GIESSEL  announced confirmation  hearings for the  Big Game                                                               
Commercial  Service   Board  and  noted  that   it  oversees  the                                                               
licensing and  regulation activities  of providers  of commercial                                                               
services  to big  game hunters  in the  interests of  the state's                                                               
wildlife  resources. They  regulate  hunting guides,  assistants,                                                               
and transporters. There  were two appointees and  she started out                                                               
by welcoming Thomas Sullivan, a new appointee to the board.                                                                     
                                                                                                                                
TOM SULLIVAN,  representing himself,  Anchorage, Alaska,  said he                                                               
plans to  retire this  year or  next and  is interested  in doing                                                               
public service. This  is one of the boards that  he is interested                                                               
in serving  on, along  with the  Board of Game  and the  Board of                                                               
Fisheries.  Those resources  are why  he  came to  Alaska in  the                                                               
first place and he is happy to contribute to them if he can.                                                                    
                                                                                                                                
3:32:52 PM                                                                                                                    
CHAIR GIESSEL  asked him  to talk about  his experience  with the                                                               
state's hunting sports.                                                                                                         
                                                                                                                                
MR. SULLIVAN answered that he has  had a love of hunting since he                                                               
was small boy growing up in  Alabama. Hunting and fishing is what                                                               
brought him to Alaska originally.  He has hunted bear, moose, and                                                               
caribou in  Alaska, but today  he hunts more in  Wyoming, because                                                               
he doesn't have  enough time to hunt otherwise, but  that will be                                                               
remedied when he  retires. He has years of  experience hunting in                                                               
different states.  He worked as  a volunteer instructor  for fish                                                               
and game  teaching a  bow hunter certification  course. He  was a                                                               
wildlife conservation  officer at Eielson  Air Force Base  for 26                                                               
years and has done a  lot of competitive shooting. Guns, hunting,                                                               
and fishing are things he loves and wants to continue doing.                                                                    
                                                                                                                                
3:34:32 PM                                                                                                                    
SENATOR STEDMAN  asked his opinion  on privatization of  big game                                                               
animals  in  Alaska  and  of   collective  ownership  of  natural                                                               
resources   including   game   animals   relative   to   Alaska's                                                               
Constitution.                                                                                                                   
                                                                                                                                
MR. SULLIVAN  replied the he  didn't understand what he  meant by                                                               
"privatization,"  but the  state's  fish and  game resources  are                                                               
here for everyone to share and take care of.                                                                                    
                                                                                                                                
SENATOR STEDMAN  explained that  there is  always an  interest in                                                               
Alaska's  natural resources  whether  it be  oil,  gas, fish,  or                                                               
sheep. Whoever  is in  the particular  business of  harvesting it                                                               
would like  to own  it and  reap the value  of ownership.  But in                                                               
Alaska the  resources are owned  in common, unlike  other states,                                                               
and he wanted to know Mr. Sullivan's position on that issue.                                                                    
                                                                                                                                
MR. SULLIVAN said he didn't like  the idea of a few people owning                                                               
any of  the fish  and game resources.  Those resources  should be                                                               
shared equally among all the people of Alaska.                                                                                  
                                                                                                                                
SENATOR STEDMAN said he understands  the sharing, but his concern                                                               
is  that industry  is trying  to privatize  those resources  much                                                               
like what was done with  the fisheries, particularly with halibut                                                               
IFQs [Individual Fishing  Quotas] on the federal  side, which are                                                               
handled  a  little bit  differently  than  the state's  fisheries                                                               
permit system.                                                                                                                  
                                                                                                                                
3:37:10 PM                                                                                                                    
MR. SULLIVAN  responded that he understands  what Senator Stedman                                                               
is saying and  he wouldn't like to see that.  Personally, that is                                                               
not in the best interests of all Alaskans.                                                                                      
                                                                                                                                
SENATOR  COGHILL said  that goes  to  the heart  of the  question                                                               
being debated  in Juneau,  which is  about giving  concessions to                                                               
guides as a management tool.                                                                                                    
                                                                                                                                
MR. SULLIVAN said he didn't  know of any circumstances where that                                                               
is being pushed on the board, and furthermore, he is against it.                                                                
                                                                                                                                
SENATOR  COGHILL thanked  him for  his military  service and  his                                                               
willingness to  serve in Alaska.  He said allocation is  a really                                                               
tough issue and  asked if he had talked to  anyone about how this                                                               
board would operate in some of those areas.                                                                                     
                                                                                                                                
MR. SULLIVAN  replied that didn't come  up at all in  their first                                                               
three-day meeting.                                                                                                              
                                                                                                                                
3:39:56 PM                                                                                                                    
SENATOR COGHILL  said access  into hunting  and fishing  areas is                                                               
one of  the things Alaskans hold  very dear, but they  are having                                                               
to compete  for them  on a national  and international  basis. He                                                               
asked if Mr.  Sullivan could look out for the  citizens of Alaska                                                               
when it comes to access to its game and fishing resources.                                                                      
                                                                                                                                
MR. SULLIVAN replied that he  shares frustrations with not having                                                               
access to  some lands, too,  and would do  all that he  could for                                                               
all Alaskans.                                                                                                                   
                                                                                                                                
CHAIR GIESSEL asked if he  heard anything about the board's large                                                               
outstanding budget shortfall.                                                                                                   
                                                                                                                                
MR.  SULLIVAN answered  yes;  it is  a  significant deficit  that                                                               
needs to  be addressed, and they  have a plan to  eliminate it in                                                               
the next three  years. Using his financial experience,  he did an                                                               
initial  analysis  and  is  waiting   for  information  from  the                                                               
department  before deciding  if they  are on  the right  track or                                                               
not. They  believe an accounting  mistake created the  problem in                                                               
the first place and they really want to clear it up.                                                                            
                                                                                                                                
CHAIR GIESSEL said it was more  than $1 million at one time, more                                                               
than  an  accounting   error.  It  pertains  to   the  amount  of                                                               
litigation  this  board   has  had  to  deal   with  mostly  over                                                               
concession areas. She  thanked him for agreeing to  serve on this                                                               
board if he is confirmed.                                                                                                       
                                                                                                                                
3:44:47 PM                                                                                                                    
CHAIR  GIESSEL  invited  James  Atkins  to  comment  on  his  re-                                                               
appointment to  the Big Game  Commercial Services Board.  He sits                                                               
in the  seat of a transporter  and has served one  four-year term                                                               
already.                                                                                                                        
                                                                                                                                
3:45:10 PM                                                                                                                    
JAMES ATKINS, representing  himself, Anchorage, Alaska, responded                                                               
that  he goes  by "Tom  Atkins" and  has lived  in Alaska  for 45                                                               
years and  has been involved  in the guiding and  flying business                                                               
for 35  years. Now, as  a retired construction worker,  he mostly                                                               
flies hunters  in Bush Alaska.  He knows a  lot of the  people in                                                               
the industry and it's his pleasure to serve on the board.                                                                       
                                                                                                                                
SENATOR COGHILL  thanked him for  serving and  said privatization                                                               
of guide  concession areas has come  up and asked him  to explain                                                               
what some of  the safeguards are for making sure  people are both                                                               
lawful and handled properly in the transporter business.                                                                        
                                                                                                                                
3:46:55 PM                                                                                                                    
SENATOR WIELECHOWSKI joined the committee.                                                                                      
                                                                                                                                
MR.  ATKINS answered  that he  is  involved with  people on  both                                                               
sides of  the fence when it  comes to concession areas.  He flies                                                               
for guides,  and for  the public  that wants  to go  hunting, but                                                               
most of  his business is  from flying guided hunters.  Years ago,                                                               
there were private  concessions on state land and  there still is                                                               
on  federal land.  He flies  for guides  who have  concessions on                                                               
federal land  and he  may also  fly a resident  hunter in  at the                                                               
same  time. Guides  compete to  provide a  good hunt.  Mr. Atkins                                                               
said he would  never put a client, guided or  unguided, on top of                                                               
another camp; he doesn't care who it is.                                                                                        
                                                                                                                                
He said a [state] guide concession  program would not be bad, but                                                               
there is  strong competition  amongst the  guides. Some  would be                                                               
left out  and certain areas  would have  huge conflicts. He  is a                                                               
transporter; he  works for both  sides and  that is what  he will                                                               
continue doing - with the legislature's permission.                                                                             
                                                                                                                                
SENATOR  COGHILL   said  the  legislature   will  debate   how  a                                                               
concession is  done, but maybe he  could help resolve one  of the                                                               
big  complaints over  places where  transporters quite  often put                                                               
campers  on  top  of  each  other. When  Senator  Coghill  was  a                                                               
youngster he was told  he had the right to do that,  but it was a                                                               
matter of  respect. Now  rights and respect  for areas  are being                                                               
misused and he asked if there  is a methodology within this board                                                               
to discipline  people -  guide or transporter  - who  are showing                                                               
huge disrespect that results in tension for the whole industry.                                                                 
                                                                                                                                
3:51:30 PM                                                                                                                    
MR.  ATKINS  answered that  the  "guide  board" just  tasked  its                                                               
investigative force  with reviewing  its ethics laws  and putting                                                               
teeth into them so  they will be obeyed. He said  there are a few                                                               
bad guides, but  a whole lot of  good ones who want  to take care                                                               
of the  land. When guides  had use  areas, they would  manage the                                                               
game on  it like a  game warden. Now, a  lot of people  out there                                                               
transport clients and  don't have a license to do  it and it's an                                                               
enforcement issue.                                                                                                              
                                                                                                                                
SENATOR COGHILL  said he  hoped they could  find a  mechanism for                                                               
dealing  those who  don't abide  by any  rules. He  asked if  the                                                               
board is  talking about  how to work  with the  different private                                                               
land  owners   on  tensions  arising   from  federal   and  state                                                               
management.                                                                                                                     
                                                                                                                                
MR. ATKINS  replied that he  didn't understand the  question, but                                                               
Native  Corporations  are represented  on  the  board, and  as  a                                                               
transporter, he  is very careful  to have  permission to be  on a                                                               
piece  of land.  Unlicensed people  don't have  that restriction,                                                               
but  those who  are invested  in making  a living  out of  it are                                                               
trying  to make  sure  people  are on  the  right  land and  have                                                               
permission  to  be there.  A  lot  of Native  Corporations  allow                                                               
access;  sometimes  there  is  a  charge  and  sometimes  just  a                                                               
permission slip.  "Everybody is trying  to get along.  That's the                                                               
main thing."                                                                                                                    
                                                                                                                                
CHAIR  GIESSEL  finding no  further  questions,  thanked him  for                                                               
joining them.                                                                                                                   
                                                                                                                                
^Confirmation  Hearing:   Commissioner,  Department   of  Natural                                                               
Resources                                                                                                                       
              Confirmation Hearing: Commissioner,                                                                           
                Department of Natural Resources                                                                             
                                                                                                                                
CHAIR  GIESSEL  introduced Andy  Mack,  the  Commissioner of  the                                                               
Department of  Natural Resources (DNR).  She said the  mission of                                                               
this department is to develop,  conserve, and maximize the use of                                                               
Alaska's natural  resources consistent with the  public interest.                                                               
DNR  manages  all  the  state-owned   land,  water,  and  natural                                                               
resources, except for  fish and game, on behalf of  the people of                                                               
Alaska. That  is approximately  100 million  acres. Approximately                                                               
60 million acres of that  is tidelands, shorelands, and submerged                                                               
lands with 40,000 miles of coast  land; it also has 40 percent of                                                               
the entire nation's fresh water flow.                                                                                           
                                                                                                                                
3:58:17 PM                                                                                                                    
ANDY   MACK,   Commissioner-designee,   Department   of   Natural                                                               
Resources  (DNR),  Anchorage, Alaska,  said  his  parents met  as                                                               
Jesuit  missionaries  at  Copper  Center  in  the  late  50s  and                                                               
eventually moved to  Soldotna where he was born in  1954. He is a                                                               
proud graduate of the Soldotna High  School Class of '82. He went                                                               
to  college in  Minnesota  and came  back to  Alaska  to work  at                                                               
various  jobs:  in the  Nikiski  Agrium  Plant, as  a  commercial                                                               
fisherman, eventually finding his way to law school.                                                                            
                                                                                                                                
He said over the past decade-plus  he has been working on natural                                                               
resource  issues on  the North  Slope,  in particular,  including                                                               
development  in  what is  state-owned  land  on the  North  Slope                                                               
(NPRA),  the OCS,  and the  1002 area.  After working  both as  a                                                               
public employee  for the North  Slope Borough, he moved  into the                                                               
private   sector.  Most   recently  he   worked  as   a  resource                                                               
development  consultant  and a  managing  director  at a  private                                                               
equity firm.                                                                                                                    
                                                                                                                                
He explained  that four or five  years before taking this  job he                                                               
was  a "land  man."  His  principal role  was  to understand  how                                                               
federal and state law worked, what  the options were for the land                                                               
owner, how they  could maximize the benefits of the  use of their                                                               
land, and  potentially access more  land. He worked  with federal                                                               
agencies,  state  government,   local  municipalities,  and  with                                                               
Alaska Native Corporations, both  regional and villages. He found                                                               
himself working  on many  interesting issues  on the  North Slope                                                               
and eventually the  Governor asked him to apply his  skill set at                                                               
DNR.  He accepted  the position  and began  on July  1, 2016.  He                                                               
said, "It's been an interesting seven months."                                                                                  
                                                                                                                                
4:01:48 PM                                                                                                                    
He said  one of the first  things he dealt with  was the on-going                                                               
transition  in  the  AKLNG  Project,   which  this  committee  is                                                               
extremely     well-versed    in     especially    the     state's                                                               
responsibilities.    Most   of    those   responsibilities    are                                                               
memorialized in SB 138. When he  took this job, he was faced with                                                               
the fact that having an  equity participation in this project had                                                               
become  very  difficult and  the  parties  generally agreed  that                                                               
something  different   was  needed.   So,  they  embarked   on  a                                                               
transition where the  state would take the lead  and the producer                                                               
partners would  (although they have differing  opinions) all come                                                               
to this  project and see  how they could  support it. He  came on                                                               
board during  the transition and  helped the state  realizing was                                                               
how it  would take over doing  what the companies were  doing. In                                                               
other words,  ExxonMobil was the  lead for the AKLNG  Project and                                                               
they had  about 200 employees  putting together  resource reports                                                               
moving through  the pre-FEED process. As  they got to the  end of                                                               
that  process, they  were determining  how they  would ramp  that                                                               
team down and the department was doing the same thing.                                                                          
                                                                                                                                
COMMISSIONER MACK said  one of the first things he  had to do was                                                               
consider  both  the  historical context,  what  the  department's                                                               
responsibilities  were going  forward,  and  what the  department                                                               
needed  to make  sure that  in  the event  some really  important                                                               
decisions  had to  be made  for Alaska  - any  decision involving                                                               
taking the gas  royalty in kind (RIK) or royalty  in value (RIV),                                                               
gas  balancing issues,  CO2 disposition,  field cost  allowances,                                                               
and  commercial  issues  -  they could  very  quickly  start  the                                                               
process of analyzing the options.                                                                                               
                                                                                                                                
He  said  the department  retained  some  very important  talent:                                                               
Black &  Veatch as a  commercial consultant, the services  of Mr.                                                               
Steve  Wright who  was  on the  AKLNG Project  team  and was  the                                                               
upstream lead, and  they were very lucky to get  Ed King who used                                                               
to  work  at  the  Department of  Revenue  (DOR),  Department  of                                                               
Natural Resources (DNR),  and the Division of Oil  and Gas (DOG).                                                               
They retained  some of  their core capabilities  at a  much lower                                                               
cost  while keeping  in mind  that at  any point  if there  is an                                                               
event  that  requires  analysis,  they  can  ramp  back  up  very                                                               
quickly.                                                                                                                        
                                                                                                                                
He  said  the  other  thing  he  faced  was  the  fact  that  the                                                               
department had  to consolidate its  budget, and it is  an amazing                                                               
testament to the 900 employees at  DNR that they proposed about a                                                               
5 percent  reduction in the  Governor's budget while  still being                                                               
able to  meet all of the  state's obligations and not  just clear                                                               
the bar, but going beyond.                                                                                                      
                                                                                                                                
4:06:49 PM                                                                                                                    
He stated that  the third thing he stepped into  was a process at                                                               
the  end  of a  particular  federal  administration, and  as  the                                                               
months ticked  by in  late 2016,  he started  to notice  that the                                                               
pace  of   decision-making  by   several  federal   agencies  was                                                               
accelerating  as well  as the  departure from  historical process                                                               
and the increased  willingness of federal agencies to  try to set                                                               
markers in  the public policy arena.  He spent a lot  of his time                                                               
engaged  in "policy  combat" conversations  trying to  understand                                                               
and position the state's administration in the strongest spot.                                                                  
                                                                                                                                
CHAIR GIESSEL said brought up  the Public Access Defense Unit and                                                               
the RS-2477  issue and  asked how  DNR has  been involved  in the                                                               
Klutina Road lawsuit effort.                                                                                                    
                                                                                                                                
COMMISSIONER MACK explained that  the department has historically                                                               
utilized a four-person group of  employees to understand what the                                                               
options are  and to assert  access where it benefits  Alaska: for                                                               
example,  building  the 11-mile  Izembek  Road  in a  refuge,  it                                                               
focused on what the claims might  be in order to fully appreciate                                                               
the   options.  A   hydrologist  position   was  added,   because                                                               
navigability is another big access issue.                                                                                       
                                                                                                                                
COMMISSIONER  MACK explained  that  at  statehood, all  navigable                                                               
waters were  conveyed to  the state. It  has resulted  in endless                                                               
meetings,  conversations, and  letters, and  many times  in court                                                               
pushing back and forth with the Bureau of Land Management (BLM).                                                                
                                                                                                                                
He said  about a  year ago  the state  actually won  the Mosquito                                                               
Fork case,  which answered the  question of whether  the Mosquito                                                               
Fork River  was navigable.  The state  thought it  was "painfully                                                               
obvious," and  asked the  BLM to disclaim  their interest  in the                                                               
water body.  They didn't do  so. They went  to trial and  spent a                                                               
tremendous amount  of money,  and at  the 11th  hour the  BLM did                                                               
disclaim their  interest in the  water body. After  that decision                                                               
was made,  the federal district  court found that they  had acted                                                               
in bad faith  and subsequently awarded the  state almost $600,000                                                               
in attorney's fees.                                                                                                             
                                                                                                                                
4:12:17 PM                                                                                                                    
He noted that this is not  unusual. The state has argued over the                                                               
Yukon River and  some other what he thinks  are plainly navigable                                                               
waterways. He  is still  trying to understand  how the  state has                                                               
ended up  in the position of  having to assert it  owns the water                                                               
body, because it was all conveyed  to the state at statehood. So,                                                               
the  hydrologist  position  was  added   to  deal  with  all  the                                                               
navigability  issues. He  is  optimistic that  it  will save  the                                                               
state some money in court costs.                                                                                                
                                                                                                                                
He said the  RS-2477 issue is incredibly important  to the state,                                                               
and  in the  late 90s  there  was legislation  to identify  these                                                               
historical rights-of-way  (RS-2477). DNR  appreciates that  it is                                                               
an  important   tool.  There  are  also   [Alaska  Native  Claims                                                               
Settlement Act]  17(b) access issues,  access over  Alaska Native                                                               
Corporation land where  the state has land on the  other side and                                                               
it's  very  difficult  to  get   to.  Most  recently,  the  state                                                               
successfully  discussed, negotiated,  and agreed  to a  deal with                                                               
the Eklutna Corporation in the Knik River area.                                                                                 
                                                                                                                                
He  said the  department realized  the Klutina  issue was  a very                                                               
strong case  for the State  of Alaska as an  historical right-of-                                                               
way  (RS-2477). They  also realized  from the  confluence of  the                                                               
Klutina Lake and  the Klutina River another four  miles of access                                                               
was needed  to get  to state  land (on the  southwest end  of the                                                               
lake).                                                                                                                          
                                                                                                                                
COMMISSIONER  MACK  said  the  department  had  a  very  thorough                                                               
discussion with the Attorney General  and her staff about options                                                               
and  they understood  the concerns,  the  historical context  the                                                               
department operates in, what the  RS-2477 means to the state, and                                                               
with  an eye  towards the  future. The  department is  very happy                                                               
with the representation it is getting.                                                                                          
                                                                                                                                
CHAIR GIESSEL reiterated  that DNR is the client  of the Attorney                                                               
General in  this case, and  asked what  his opinion is  about the                                                               
Attorney  General  and her  proposed  settlement  to the  Klutina                                                               
issue.                                                                                                                          
                                                                                                                                
COMMISSIONER MACK answered  he identified it as  a priority early                                                               
on and  talked with the  Department of  Law (DOL) about  what the                                                               
objectives and principles  are, and what is needed to  get a good                                                               
result in this case, as well  as protect the RS-2477 process. His                                                               
opinion is that  they are getting very  good representation right                                                               
now,  but nothing  has been  resolved.  The trial  date has  been                                                               
vacated while a proposed settlement is being worked out.                                                                        
                                                                                                                                
4:18:00 PM                                                                                                                    
CHAIR GIESSEL  asked what  his opinion would  be of  a settlement                                                               
that   relinquished  the   100-foot   RS-2477  right-of-way   and                                                               
diminished it to 60-foot 17(b) easement.                                                                                        
                                                                                                                                
COMMISSIONER MACK related  that two principals are  at stake: one                                                               
is the longer-term interest of  the State of Alaska. For example,                                                               
the  Izembek  has  a  three-fold strategy:  solve  the  issue  by                                                               
getting  a road  built  through the  political  process in  which                                                               
Congress  approves  a land  exchange.  The  second option  is  an                                                               
ANILCA [Alaska  National Interest  Lands Conservation  Act] Title                                                               
11 claim; the third option is to establish an RS-2477.                                                                          
                                                                                                                                
He said first, they are going  to make sure that they protect the                                                               
process for  identifying and  perfecting other  RS-2477s. Second,                                                               
he wants  a good result  in this particular case  that recognizes                                                               
that first principle.                                                                                                           
                                                                                                                                
SENATOR STEDMAN shifted  the same topic from the  frozen north to                                                               
the tropical  south of Alaska and  said the Tongass is  about the                                                               
size of West Virginia, but  West Virginia has about 30,000 timber                                                               
jobs. Alaska has  not more than 300. They have  been dealing with                                                               
the roadless  rule with utility  corridors (4407  easements), but                                                               
there  seems to  be a  reluctance from  the United  States Forest                                                               
Service to  convey these to the  state. They are trying  to clean                                                               
up these  easements, so Alaska  can have a  transportation system                                                               
in the power corridor.                                                                                                          
                                                                                                                                
COMMISSIONER  MACK he  would characterize  it as  more than  just                                                               
"reluctance" to  perfect these easements. They  just went through                                                               
the  process of  protesting the  final  Tongass plan  and it  was                                                               
particularly  unsatisfying. Alaska  was forced  into a  process -                                                               
even  though they  requested to  be  distinct and  separate as  a                                                               
sovereign in dealing with the  federal government - of sitting in                                                               
a room with  every other protestor including groups  that are not                                                               
based  in  Alaska  and  very  thoroughly  discussed  the  state's                                                               
objections to  that particular Forest Service  plan that included                                                               
those easements. But they may  have only achieved the ability for                                                               
the state to  take that plan to court, because  it didn't get any                                                               
relief. At  the very  least, Alaska  preserved its  legal options                                                               
for remedy, through the options are thin.                                                                                       
                                                                                                                                
4:22:21 PM                                                                                                                    
SENATOR STEDMAN thanked  him and the department  for helping them                                                               
deal with that issue in the Tongass.                                                                                            
                                                                                                                                
SENATOR MEYER  remarked that it  looks like most of  his resource                                                               
background  work  in  oil  and  gas was  for  legal  analysis  or                                                               
consulting and  asked if he  had prior experience in  hunting and                                                               
fishing before getting this job.                                                                                                
                                                                                                                                
COMMISSIONER  MACK  replied  that  he didn't  know  how  one  can                                                               
prepare to  be DNR  commissioner. Most people  have a  mining, or                                                               
oil and gas  background, not both. He doesn't  have any financial                                                               
training other  than learning on the  job when he was  a managing                                                               
director at PT Capital. He uses  his training as a lawyer in both                                                               
the public and private sectors.                                                                                                 
                                                                                                                                
SENATOR MEYER agreed that it would  be hard to have experience in                                                               
all the  department issues. He  asked if President Trump  were to                                                               
call him tomorrow and ask what's  the first thing he could do for                                                               
the state, what he would say.                                                                                                   
                                                                                                                                
4:27:24 PM                                                                                                                    
COMMISSIONER MACK  replied that he  would make a  compound answer                                                               
to  that: one,  open  up access  in the  Arctic.  That means  two                                                               
things:  support  legislation,  which requires  and  compels  the                                                               
government to  hold two lease  sales in  the 1002 area  and, two,                                                               
rewrite the  integrated activity plan for  the National Petroleum                                                               
Reserve Alaska (NPRA). Doing so  would provide access to hundreds                                                               
of millions,  if not billions,  of barrels of  currently hard-to-                                                               
get-at oil.                                                                                                                     
                                                                                                                                
SENATOR MEYER  said that was a  good answer. Access to  that much                                                               
oil would  make the  commissioner's financial  background useful.                                                               
He  asked how  permitting can  that be  expedited at  the federal                                                               
level.                                                                                                                          
                                                                                                                                
COMMISSIONER  MACK  said  he just  mentioned  what  he  considers                                                               
significant federal action,  which in the case of  the 1002 area,                                                               
is required  before access can be  provided via lease sales  - to                                                               
basically create  a property right  in the 1002, which  he thinks                                                               
can be done safely and effectively.                                                                                             
                                                                                                                                
He  said in  the NPRA,  one of  the things  that happened  at the                                                               
beginning  of the  Obama  administration is  they  took a  United                                                               
States  Geologic  Survey  (USGS) estimate  for  the  economically                                                               
recoverable oil  base and  downgraded it  from about  9.5 billion                                                               
barrels to 900  million barrels. Then they followed  that up with                                                               
removing  50 percent  of the  land  from the  area available  for                                                               
leasing,  although some  of  that is  probably  more valuable  as                                                               
caribou habitat. But some of it  was just next to what people are                                                               
hearing about in the news with respect to Willow.                                                                               
                                                                                                                                
He said he  thinks the number is a little  closer to the original                                                               
USGS estimate  on the basis  that close  to 30 wells  are already                                                               
drilled at  CD-5. And  gravel has  been laid  for GMT-1  which is                                                               
estimated to be 30,000  barrels a day. A plan is  in place to get                                                               
a permit for and to sanction  GMT-2, which is also supposed to be                                                               
a 30,000-barrels  a day. Willow  was just  announced to be  a 300                                                               
million-barrel  find. So,  it  doesn't take  somebody  who has  a                                                               
special degree or insider information  to figure out very quickly                                                               
they  have  already  probably  achieved   1  billion  barrels  of                                                               
production in those four distinct  projects. The rest of the NPRA                                                               
has some  outstanding prospects, which  the state can  along with                                                               
the stakeholders on the North  Slope devise a tremendously strong                                                               
plan which  gives the  ability to continue  to move  further west                                                               
into the NPRA.                                                                                                                  
                                                                                                                                
COMMISSIONER  MACK   said  a  couple   of  things  he   would  do                                                               
immediately are to argue that Alaska  has spent quite a few years                                                               
perfecting its safety and efficiency  crafts, particularly on the                                                               
North  Slope;  they  are  "some  of the  most  safely  run,  most                                                               
efficiently  run, projects  on  the globe."  But  on November  3,                                                               
2015, the  U.S. president wrote  a letter adding five  agencies -                                                               
the  Department of  Defense, the  Department of  Agriculture, the                                                               
Environmental   Protection  Agency   (EPA),  the   Department  of                                                               
Interior,  and a  fifth agency  -  to the  ones already  required                                                               
under  the  Clean  Water  Act  to develop  a  secondary  type  of                                                               
compensatory mitigation.                                                                                                        
                                                                                                                                
He said  Alaska has  never shied away  from doing  things safely.                                                               
Companies he  works with are  never bashful if they  think adding                                                               
protections gets  them to production quicker.  This policy wasn't                                                               
generated in Alaska, but it has significant impacts here.                                                                       
                                                                                                                                
4:33:56 PM                                                                                                                    
SENATOR MEYER  said he was thinking  more along the lines  of the                                                               
Armstrong   Repsol  discovery   and   the  Environmental   Impact                                                               
Statement (EIS) and  the federal permits they  will probably have                                                               
to get. He would like to see the oil get into the pipe faster.                                                                  
                                                                                                                                
COMMISSIONER MACK  commented that is  a good point and  the Corps                                                               
of Engineers is  the lead agency in writing  that permit, because                                                               
it requires  a Clean Water  Act Permit.  What is relevant  to the                                                               
Armstrong  case is  that the  Corps  has taken  over primacy  for                                                               
Clean  Water  Act permits,  but  Armstrong  has a  Memorandum  of                                                               
Understanding  (MOU)  with  the Environmental  Protection  Agency                                                               
(EPA),  which is  designated the  lead agency;  however, in  many                                                               
cases,  it  was deemed  that  the  Corps  of Engineers  was  more                                                               
relevant and better able to produce these permits.                                                                              
                                                                                                                                
He explained  that under  this MOU,  one of  the things  that can                                                               
happen is the EPA and U.S.  Fish and Wildlife Service would be at                                                               
the table with  the Corps of Engineers  in certain circumstances,                                                               
and  they  would be  pursuing  their  objectives under  different                                                               
federal acts.  There is  a concern  that at the  end of  the day,                                                               
even  though the  Corps might  want to  write a  permit for  that                                                               
project,  that   the  EPA  would   threaten  to  elevate   it  to                                                               
Washington, D.C. for further negotiation  and discussion. This is                                                               
what happened  with CD-5 to  the point that eventually  the Corps                                                               
denied its  permit, because of  concerns based on what  they were                                                               
hearing from their sister agency, the EPA.                                                                                      
                                                                                                                                
He said they  are working very actively -  Armstrong has actually                                                               
employed OPMP [Office of Project  Management and Permitting] team                                                               
that is doing  everything it can to work out  the bugs. Again, he                                                               
said Alaska  has been extremely  successful in developing  in the                                                               
Arctic  safely, efficiently,  and with  as small  a footprint  as                                                               
possible.                                                                                                                       
                                                                                                                                
4:36:20 PM                                                                                                                    
SENATOR  HUGHES  went back  to  the  access  issue and  said  the                                                               
federal  government  can  actually vacate  17(b)  easements,  and                                                               
asked  if it  looks like  the Klutina  case will  end up  being a                                                               
17(b)  easement and  at what  point  would the  department, as  a                                                               
defendant, proceed to litigate.                                                                                                 
                                                                                                                                
COMMISSIONER MACK  answered that  his ability  to respond  to the                                                               
specifics  of this  settlement is  zero.  But he  could say  that                                                               
there  are a  number  of options  when one  is  faced with  these                                                               
circumstances  and they  have  to be  weighed  and measured  very                                                               
carefully. He  has worked with  the Eklutna Corporation  to allow                                                               
folks to  get from the  Knik Public  Use Area, over  Eklutna land                                                               
into the valley near the Knik Glacier where there is state land.                                                                
                                                                                                                                
SENATOR HUGHES asked what he  thought the next "public access hot                                                               
spot" might be  - possibly the Rex  Trail - and what  he is doing                                                               
to head it off.                                                                                                                 
                                                                                                                                
COMMISSIONER MACK  answered that the  Rex Trail is  definitely an                                                               
issue  of concern  that they  have  tried to  be very  thoughtful                                                               
about.  In  particular, he  knows  the  Rex  Trail has  become  a                                                               
"traditional  hunting access  point"  for a  lot  of Alaskans.  A                                                               
program  limiting certain  circumstances  was laid  out, like  no                                                               
vehicles above  1,500 pounds and  that didn't have  certain kinds                                                               
of tracks. He didn't know what the next hot spot would be.                                                                      
                                                                                                                                
4:40:35 PM                                                                                                                    
SENATOR HUGHES said  she was particularly concerned  with the Rex                                                               
Trail  which is  really the  result of  the Alaska  Department of                                                               
Fish and  Game (ADF&G) doing a  good job of increasing  the moose                                                               
population but  the Department of Natural  Resources (DNR) didn't                                                               
provide adequate access to them.  She knows of another area where                                                               
ADF&G is  doing a good  job with active predator  management west                                                               
of the  Susitna River, (close  to a large human  population), and                                                               
DNR needs to do a good job of providing access there, too.                                                                      
                                                                                                                                
4:41:53 PM                                                                                                                    
SENATOR WIELECHOWSKI said a number  of years ago, the legislature                                                               
funded a  boat ramp  access on  the Kasilof  River where  a sport                                                               
fisherman died  when a cord used  in lieu of a  boat ramp snapped                                                               
and killed  him. Now he  understands that the project  has slowed                                                               
down and  wanted to know why.  It's dangerous to get  drift boats                                                               
out,  which is  important for  his constituents  who access  that                                                               
river for dip netting and fishing.                                                                                              
                                                                                                                                
COMMISSIONER MACK  replied that  he would be  very happy  to talk                                                               
about  this as  access around  the Kenai  and Kasilof  Rivers are                                                               
obviously big  concerns. He  disclosed that  up to  30,000 people                                                               
visit the  mouth of  the Kenai River  annually to  participate in                                                               
one  of   a  number  of   fisheries:  personal  use,   sport,  or                                                               
subsistence. He  said the mouth of  the Kasilof River is  an area                                                               
that  is starting  to draw  ever-increasing numbers  of visitors,                                                               
close to about  10,000 people annually. It's  complicated to have                                                               
that many  people on a river  system, which is about  a third the                                                               
size of the Kenai River.                                                                                                        
                                                                                                                                
He explained that  a large part of this issue  is being driven by                                                               
successful fisheries  management and the types  of fisheries that                                                               
were created. People  are going to go where the  fish are and the                                                               
department  doesn't  have any  control  over  where they  go.  In                                                               
response  to  that,  the  State of  Alaska  sought  and  obtained                                                               
funding for a parking lot project  on the north side of the river                                                               
which is half-way done. They  are going to do everything possible                                                               
to get  that completed before  people show  up at the  mouth this                                                               
summer.                                                                                                                         
                                                                                                                                
Large numbers of people are also  coming to the south side of the                                                               
Kasilof   River.    The   legislature   initiated    a   two-fold                                                               
appropriation in  2010/11 that was  labeled in both  cases simply                                                               
for "boat  take-out." So, the  department looked at a  variety of                                                               
options. Significant  concerns were  expressed by over  100 local                                                               
community members.  Letters came from three  organizations: Kenai                                                               
River  Sportfishing Association  that  supported  it, the  United                                                               
Cook Inlet Association  that opposed it, and  the Kenai Peninsula                                                               
Borough which  expressed serious concerns that  they had actually                                                               
even  started   the  pre-process  of  getting   permits  for  the                                                               
facility.                                                                                                                       
                                                                                                                                
So, he decided  to stop moving forward on the  boat ramp project.                                                               
If built  as proposed  it would  have brought  more people  to an                                                               
area that doesn't  have a management plan or a  budget to address                                                               
it. He  is not  suggesting a  huge budget,  but if  10,000 people                                                               
show up  to recreate, it seems  like they should think  about how                                                               
to help them  with sanitary and safety issues. The  City of Kenai                                                               
has been able  to do some things around the  Kenai River, because                                                               
it is within the City of  Kenai. But the Kasilof has no municipal                                                               
government other than the borough.                                                                                              
                                                                                                                                
COMMISSIONER MACK  said his intention  is to  go back and  have a                                                               
conversation with the  stakeholders about how to  best manage all                                                               
of  that activity  around that  river  system. How  that is  done                                                               
should  contemplate   a  very  popular  fishery   which  is  very                                                               
important  to the  people who  go  down there;  they are  filling                                                               
their freezers  with fish for  the winter  and that is  what they                                                               
intend to do.                                                                                                                   
                                                                                                                                
4:48:09 PM                                                                                                                    
SENATOR  WIELECHOWSKI commented  that  it concerns  him that  the                                                               
drift  fleet is  getting involved  in a  sport river  boat launch                                                               
issue.  The  legislature, as  the  appropriating  body, had  this                                                               
debate  several years  ago  and appropriated  it,  and he  didn't                                                               
think the  executive branch  gets to say  no. The  governor could                                                               
have vetoed  it, but  he didn't.  He said, "I  think you  have an                                                               
obligation to build it."                                                                                                        
                                                                                                                                
CHAIR GIESSEL opened public comment on all three appointees.                                                                    
                                                                                                                                
4:49:33 PM                                                                                                                    
WAYNE   KUBAT,  Vice   President,  Alaska   Hunters  Association,                                                               
Wasilla, Alaska,  supported James Atkins' appointment  to the Big                                                               
Game Commercial  Services Board.  He related his  wide background                                                               
in  the hunting  arena saying  he  first met  Mr. Atkins  several                                                               
decades ago when  he rescued Mr. Kubat and his  wife's dog out of                                                               
an upside-down Super  Cub in a remote part of  Alaska.  He didn't                                                               
see  him  again  until  20  or  30 years  later  at  a  Big  Game                                                               
Commercial  Services  Board meeting  in  Fairbanks.  A few  years                                                               
after that he was a transporter member on the board.                                                                            
                                                                                                                                
Other than being  just a really nice guy, he  said he appreciates                                                               
Tom's  experience   and  professionalism   on  the  board   as  a                                                               
transporter member.  He stated  that Mr. Atkins  has a  wealth of                                                               
outdoor experience, does  his homework, and is  willing to listen                                                               
and  think things  through.  He  said Mr.  Atkins  has no  preset                                                               
agenda  to  benefit himself  and  no  axe  to grind  against  any                                                               
special interest  or group. He stated  that he has not  heard Mr.                                                               
Atkins talk  bad about anyone and  never met anyone that  has had                                                               
anything bad to say about him.                                                                                                  
                                                                                                                                
4:51:43 PM                                                                                                                    
THOR STACY,  lobbyist and Contract Director,  Government Affairs,                                                               
Alaska Professional  Hunters Association (APHA),  Juneau, Alaska,                                                               
supported Mr. Atkins' and Mr.  Sullivan's appointments to the Big                                                               
Game  Commercial Services  Board.  He said  Mr.  Sullivan has  an                                                               
above-average background for a member  of the public on the board                                                               
(that has dedicated  seats) as well as being  a conscientious and                                                               
sensitive regulator.                                                                                                            
                                                                                                                                
MR.  STACY said  he would  caution a  new board  member that  the                                                               
board  itself doesn't  have  the tools  to  directly address  the                                                               
drivers of the costs of  litigation resulting from an unregulated                                                               
guide industry  on state land.  Similarly, the APHA  doesn't have                                                               
tools to  argue for the  state or  for the state's  primacy where                                                               
regulation of their  industry for land access  is concerned; that                                                               
is a huge developing issue in the Tongass Forest.                                                                               
                                                                                                                                
CHAIR  GIESSEL,  finding  no   further  comments,  closed  public                                                               
testimony and invited Mr. Mack back to the table.                                                                               
                                                                                                                                
4:54:28 PM                                                                                                                    
SENATOR COGHILL  thanked him for  the work the  administration is                                                               
doing on  the 1002 issue. Should  he get to see  President Trump,                                                               
the public  land orders  are at the  top of the  list and  to let                                                               
them know if  there is any way the legislature  can help. He also                                                               
asked  if  he  knew  of  anything  they  could  do  to  help  404                                                               
permitting  that has  been the  bane  of getting  things done  up                                                               
here.                                                                                                                           
                                                                                                                                
COMMISSIONER  MACK  answered  that  he  had  the  opportunity  in                                                               
Washington,  D.C.,  during  the National  Governor's  Association                                                               
meeting to meet with then-nominee  Zenke and administrator Pruitt                                                               
and  the  consensus  was  that  they were  going  to  start  with                                                               
understanding the basis for state's  concerns. The most important                                                               
thing to do in his eyes is  point to the "pretty strong record in                                                               
Alaska"  of safe  and responsible  resource development,  talking                                                               
about that consistently is important.  The reality is that people                                                               
are concerned about the environment and the world we live in.                                                                   
                                                                                                                                
4:57:11 PM                                                                                                                    
SENATOR COGHILL  said he totally  agrees with what is  being done                                                               
in the defense  of submerged waters in Alaska and  it is a battle                                                               
that "we don't need to lighten up on at this point."                                                                            
                                                                                                                                
4:57:38 PM                                                                                                                    
CHAIR GIESSEL  said the Department of  Environmental Conservation                                                               
(DEC) is holding workshops on Tier  3 waters around the state and                                                               
asked how DNR is involved, if at all.                                                                                           
                                                                                                                                
COMMISSIONER MACK replied that he  didn't know how the department                                                               
is involved, but he would get back  to her on that. He knows they                                                               
have some concerns.                                                                                                             
                                                                                                                                
CHAIR GIESSEL asked if the AKLNG Project has all the land                                                                       
rights-of-way it needs secured.                                                                                                 
                                                                                                                                
COMMISSIONER MACK replied he believed it does, but the access                                                                   
could be better. Some private land owners are on the route, but                                                                 
he is not an expert on it.                                                                                                      
                                                                                                                                
CHAIR GIESSEL asked him to forward any clarification on that to                                                                 
her and asked if the committee was okay with forwarding this                                                                    
nominee. Everyone nodded yes. She stated the following:                                                                         
                                                                                                                                
     In   accordance  with   AS  39.05.080,   the  Resources                                                                    
     Committee reviewed  the following and  recommends these                                                                    
     appointments  be  forwarded  to  a  joint  session  for                                                                    
     consideration:  Big  Game  Commercial  Services  Board:                                                                    
     James  (Tom) Atkins,  Thomas Sullivan;  Commissioner of                                                                    
     Department of Natural Resources (DNR), Andy Mack.                                                                          
                                                                                                                                
     This does not  reflect an intent by any  of the members                                                                    
     to  vote  for  or  against the  confirmation  of  these                                                                    
     individuals during any further sessions.                                                                                   
                                                                                                                                
5:00:35 PM                                                                                                                    
CHAIR GIESSEL adjourned the Senate Resources Committee meeting                                                                  
at 5:00 p.m.                                                                                                                    

Document Name Date/Time Subjects
1. Big Game Commercial Services Board Fact Sheet.pdf SRES 3/15/2017 3:30:00 PM
Big Game Commercial Services Board
2. Comm Services Board - Resume - James Atkins.pdf SRES 3/15/2017 3:30:00 PM
Big Game Commercial Services Board
3. Comm Services Board - Resume - Thomas Sullivan.pdf SRES 3/15/2017 3:30:00 PM
Big Game Commercial Services Board
4. Natural Resources Commissioner - Resume - Andy Mack.pdf SRES 3/15/2017 3:30:00 PM
Dept of Natural Resources
Corrected AGENDA-3-15-17.pdf SRES 3/15/2017 3:30:00 PM
5. Comm Services Board - Support for Sullivan - Kelly Vrem - 3 - 20 - 17.pdf SRES 3/15/2017 3:30:00 PM
Big Game Commercial Services Board