04/08/2010 03:30 PM Senate RESOURCES
| Audio | Topic | 
|---|---|
| Start | |
| Overview from Conoco Philips | |
| HB210 | |
| HJR40 | |
| HJR26 | |
| HCR10 | |
| Adjourn | 
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
| + | HB 210 | TELECONFERENCED | |
| += | HCR 10 | TELECONFERENCED | |
| + | HJR 26 | TELECONFERENCED | |
| + | HJR 40 | TELECONFERENCED | |
| + | TELECONFERENCED | 
                    ALASKA STATE LEGISLATURE                                                                                  
              SENATE RESOURCES STANDING COMMITTEE                                                                             
                         April 8, 2010                                                                                          
                           3:35 p.m.                                                                                            
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Senator Lesil McGuire, Co-Chair                                                                                                 
Senator Bill Wielechowski, Co-Chair                                                                                             
Senator Hollis French                                                                                                           
Senator Thomas Wagoner                                                                                                          
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Senator Charlie Huggins, Vice Chair                                                                                             
Senator Bert Stedman                                                                                                            
Senator Gary Stevens                                                                                                            
                                                                                                                                
OTHER LEGISLATORS PRESENT                                                                                                     
                                                                                                                              
Representative Bryce Edgmon                                                                                                     
Representative Cherisse Millett                                                                                                 
Representative Jay Ramras                                                                                                       
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
OVERVIEW FROM CONOCOPHILLIPS                                                                                                    
                                                                                                                                
     - HEARD                                                                                                                    
                                                                                                                                
CS FOR HOUSE BILL NO. 210(RES)                                                                                                  
"An Act designating Kinzarof Lagoon  as part of the Izembek State                                                               
Game  Refuge;  authorizing  a  land  exchange  with  the  federal                                                               
government in which  state land adjacent to  the Izembek National                                                               
Wildlife  Refuge   and  within  the  Alaska   Peninsula  National                                                               
Wildlife Refuge is exchanged for federal  land to serve as a road                                                               
corridor  through  the  Izembek   National  Wildlife  Refuge  and                                                               
federal land  located on  Sitkinak Island;  and providing  for an                                                               
effective date."                                                                                                                
                                                                                                                                
     - HEARD AND HELD                                                                                                           
                                                                                                                                
CS FOR HOUSE JOINT RESOLUTION NO. 40(RES)                                                                                       
Opposing  the   proposed  designation  by  the   National  Marine                                                               
Fisheries Service of 3,000 square  miles of upper Cook Inlet, the                                                               
mid-inlet, all  of the inlet's  western shores, and  Kachemak Bay                                                               
as critical habitat for beluga whales.                                                                                          
                                                                                                                                
     - HEARD AND HELD                                                                                                           
                                                                                                                                
HOUSE JOINT RESOLUTION NO. 26                                                                                                   
Urging  the  United  States  Congress  to  adequately  fund  land                                                               
surveys  in Alaska  in order  to issue  patents to  the State  of                                                               
Alaska and Alaska Native corporations.                                                                                          
                                                                                                                                
     - HEARD AND HELD                                                                                                           
                                                                                                                                
CS FOR HOUSE CONCURRENT RESOLUTION NO. 10(RES)                                                                                  
Urging the  Governor to exercise  all available legal  options to                                                               
restrain the  United States Department of  the Interior, National                                                               
Park Service, from intruding on  the sovereign right of the state                                                               
to exercise jurisdiction over navigable  water and submerged land                                                               
and urging the  Governor to allocate sufficient  resources to the                                                               
Department of Law,  the Department of Natural  Resources, and the                                                               
Department  of Fish  and  Game  to defend  the  state's right  to                                                               
manage the public use of its navigable water.                                                                                   
                                                                                                                                
     - HEARD AND HELD                                                                                                           
                                                                                                                                
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
BILL: HB 210                                                                                                                  
SHORT TITLE: IZEMBEK STATE GAME REFUGE LAND EXCHANGE                                                                            
SPONSOR(s): REPRESENTATIVE(s) EDGMON                                                                                            
                                                                                                                                
04/01/09       (H)       READ THE FIRST TIME - REFERRALS                                                                        
04/01/09       (H)       RES                                                                                                    
04/08/09       (H)       RES AT 1:00 PM BARNES 124                                                                              
04/08/09       (H)       Moved CSHB 210(RES) Out of Committee                                                                   
04/08/09       (H)       MINUTE(RES)                                                                                            
04/10/09       (H)       RES RPT CS(RES) 6DP 3NR                                                                                
04/10/09       (H)       DP: OLSON, SEATON, WILSON, EDGMON,                                                                     
                        NEUMAN, JOHNSON                                                                                         
04/10/09       (H)       NR: GUTTENBERG, TUCK, KAWASAKI                                                                         
04/11/09       (H)       TRANSMITTED TO (S)                                                                                     
04/11/09       (H)       VERSION: CSHB 210(RES)                                                                                 
04/13/09       (S)       READ THE FIRST TIME - REFERRALS                                                                        
04/13/09       (S)       RES                                                                                                    
04/08/10       (S)       RES AT 3:30 PM BUTROVICH 205                                                                           
                                                                                                                                
BILL: HJR 40                                                                                                                  
SHORT TITLE: COOK INLET/KACHEMAK BELUGA POPULATION                                                                              
SPONSOR(s): REPRESENTATIVE(s) MILLETT                                                                                           
                                                                                                                                
01/27/10       (H)       READ THE FIRST TIME - REFERRALS                                                                        
01/27/10       (H)       RES                                                                                                    
02/24/10       (H)       RES AT 1:15 PM BARNES 124                                                                              
02/24/10       (H)       Moved CSHJR 40(RES) Out of Committee                                                                   
02/24/10       (H)       MINUTE(RES)                                                                                            
02/26/10       (H)       RES RPT CS(RES) 3DP 2NR                                                                                
02/26/10       (H)       DP: P.WILSON, NEUMAN, JOHNSON                                                                          
02/26/10       (H)       NR: SEATON, TUCK                                                                                       
03/01/10       (H)       NOT ADVANCED TO THIRD READING SAME DAY                                                                 
03/01/10       (H)       BEFORE THE HOUSE IN SECOND READING                                                                     
03/01/10       (H)       TRANSMITTED TO (S)                                                                                     
03/01/10       (H)       VERSION: CSHJR 40(RES)                                                                                 
03/02/10       (S)       READ THE FIRST TIME - REFERRALS                                                                        
03/02/10       (S)       RES                                                                                                    
04/08/10       (S)       RES AT 3:30 PM BUTROVICH 205                                                                           
                                                                                                                                
BILL: HJR 26                                                                                                                  
SHORT TITLE: STATEHOOD/ANCSA LAND SURVEY FUNDING                                                                                
SPONSOR(s): REPRESENTATIVE(s) FAIRCLOUGH                                                                                        
                                                                                                                                
03/18/09       (H)       READ THE FIRST TIME - REFERRALS                                                                        
03/18/09       (H)       RES                                                                                                    
04/06/09       (H)       RES AT 1:00 PM BARNES 124                                                                              
04/06/09       (H)       Moved Out of Committee                                                                                 
04/06/09       (H)       MINUTE(RES)                                                                                            
04/07/09       (H)       RES RPT 3DP 3NR                                                                                        
04/07/09       (H)       DP: WILSON, JOHNSON, NEUMAN                                                                            
04/07/09       (H)       NR: OLSON, SEATON, TUCK                                                                                
02/15/10       (H)       TRANSMITTED TO (S)                                                                                     
02/15/10       (H)       VERSION: HJR 26                                                                                        
02/17/10       (S)       READ THE FIRST TIME - REFERRALS                                                                        
02/17/10       (S)       RES                                                                                                    
04/08/10       (S)       RES AT 3:30 PM BUTROVICH 205                                                                           
                                                                                                                                
BILL: HCR 10                                                                                                                  
SHORT TITLE: OPPOSE FED. CONTROL OF STATE LAND & WATER                                                                          
SPONSOR(s): REPRESENTATIVE(s) HAWKER                                                                                            
                                                                                                                                
02/27/09       (H)       READ THE FIRST TIME - REFERRALS                                                                        
02/27/09       (H)       RES                                                                                                    
03/30/09       (H)       RES AT 1:00 PM BARNES 124                                                                              
03/30/09       (H)       Moved CSHCR 10(RES) Out of Committee                                                                   
03/30/09       (H)       MINUTE(RES)                                                                                            
04/01/09       (H)       RES RPT CS(RES) NT 6DP 1NR                                                                             
04/01/09       (H)       DP:   OLSON,   TUCK,   SEATON,   WILSON,                                                               
                        JOHNSON, NEUMAN                                                                                         
04/01/09       (H)       NR: GUTTENBERG                                                                                         
04/10/09       (H)       BEFORE THE HOUSE                                                                                       
04/10/09       (H)       TRANSMITTED TO (S)                                                                                     
04/10/09       (H)       VERSION: CSHCR 10(RES)                                                                                 
04/11/09       (S)       READ THE FIRST TIME - REFERRALS                                                                        
04/11/09       (S)       RES                                                                                                    
04/15/09       (S)       RES AT 3:30 PM BUTROVICH 205                                                                           
04/15/09       (S)       Scheduled but not Heard                                                                                
04/08/10       (S)       RES AT 3:30 PM BUTROVICH 205                                                                           
                                                                                                                                
                                                                                                                              
WITNESS REGISTER                                                                                                              
                                                                                                                                
DAN CLARK, Manager                                                                                                              
Cook Inlet Assets                                                                                                               
ConocoPhillips Alaska                                                                                                           
POSITION STATEMENT: Presented ConocoPhillips overview on Cook                                                                 
Inlet oil and gas issues.                                                                                                       
                                                                                                                                
KAREY LOCKHART                                                                                                                  
Marathon Oil                                                                                                                    
POSITION STATEMENT: Was available for questions on Cook Inlet                                                                 
oil and gas issues.                                                                                                             
                                                                                                                                
REPRESENTATIVE EDGMON                                                                                                           
Alaska State Legislature                                                                                                        
Juneau, AK                                                                                                                      
POSITION STATEMENT: Sponsor of HB 210                                                                                         
                                                                                                                                
STANLEY MACK, Mayor                                                                                                             
Aleutian Seas Borough                                                                                                           
POSITION STATEMENT: Supported CSHB 210.                                                                                       
                                                                                                                                
HENRY MACK, Mayor                                                                                                               
King Cove, Alaska                                                                                                               
POSITION STATEMENT: Supported CSHB 210(RES).                                                                                  
                                                                                                                                
DICK MYLIUS, Director                                                                                                           
Division of Mining, Land and Water                                                                                              
Department of Natural Resources (DNR)                                                                                           
POSITION STATEMENT: Supported CSHB 210(RES).                                                                                  
                                                                                                                                
TIM CLARK                                                                                                                       
Staff to Representative Edgmon                                                                                                  
Alaska State Legislature                                                                                                        
Juneau, AK                                                                                                                      
POSITION STATEMENT: Commented on HB 210 for the sponsor.                                                                      
                                                                                                                                
REPRESENTATIVE MILLETT                                                                                                          
Alaska State Legislature                                                                                                        
Juneau, AK                                                                                                                      
POSITION STATEMENT: Sponsor of HJR 40.                                                                                        
                                                                                                                                
JASON BRUNE, Executive Director                                                                                                 
Rural Development Council (RDC)                                                                                                 
POSITION STATEMENT: Supported HJR 40.                                                                                         
                                                                                                                                
CRYSTAL KOENEMAN                                                                                                                
Staff to Representative Fairclough                                                                                              
Alaska State Legislature                                                                                                        
Juneau, AK                                                                                                                      
POSITION STATEMENT: Commented HJR 26 for the sponsor.                                                                         
                                                                                                                                
REPRESENTATIVE HAWKER                                                                                                           
Alaska State Legislature                                                                                                        
Juneau, AK                                                                                                                      
POSITION STATEMENT: Sponsor of HCR 10.                                                                                        
                                                                                                                                
DICK MYLIUS, Director                                                                                                           
Division of Mining, Land and Water                                                                                              
Department of Natural Resources (DNR)                                                                                           
POSITION STATEMENT: Commented on HCR 10.                                                                                      
                                                                                                                                
TINA CUNNING                                                                                                                    
Subsistence and Federal Issues Coordinator                                                                                      
Department of Fish and Game (ADF&G)                                                                                             
Juneau, AK                                                                                                                      
POSITION STATEMENT: Supported HCR 10.                                                                                         
                                                                                                                                
JOHN STURGEON                                                                                                                   
Representing himself                                                                                                            
POSITION STATEMENT: Supported CSHCR 10.                                                                                       
                                                                                                                                
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
3:35:00 PM                                                                                                                    
CO-CHAIR LESIL MCGUIRE called the Senate Resources Standing                                                                   
Committee meeting to order at 3:35 p.m. Present at the call to                                                                  
order were Senators Wagoner, French, Wielechowski and McGuire.                                                                  
                                                                                                                                
^Overview from Conoco Philips                                                                                                   
              Overview from ConocoPhillips Alaska                                                                           
                                                                                                                                
3:35:18 PM                                                                                                                    
CO-CHAIR MCGUIRE  announced a  presentation by  ConocoPhillips as                                                               
the first order of business.                                                                                                    
                                                                                                                                
3:36:01 PM                                                                                                                    
DAN  CLARK, Manager,  Cook Inlet  Assets, ConocoPhillips  Alaska,                                                               
said  they operate  three  assets  in the  Cook  Inlet area:  the                                                               
Beluga River  Unit, the North  Cook Inlet offshore unit,  and the                                                               
Kenai   LNG    plant   in   Nikiski.    ConocoPhillips   operates                                                               
approximately   160-170  mmcf/day   of  natural   gas  production                                                               
currently in the two units.                                                                                                     
                                                                                                                                
He said he  would give a brief background of  the Kenai LNG plant                                                               
and discuss  the benefits  of the continued  operation of  it. He                                                               
said it  has been operating  for over  40 years and  is currently                                                               
the  only significant  industrial user  of natural  gas in  South                                                               
Central Alaska.  It received a  two-year extension to  its export                                                               
license  effective April  1, 2009.  This  extension provided  for                                                               
approval to export up to 99  tcf/btus or 99 bcf. During the first                                                               
year they exported 27.9 trillion  btus.                                                                                         
                                                                                                                                
He said  the plant  is owned  by the  Kenai LNG  Corporation with                                                               
ConocoPhillips owning 70  percent of the shares  and Marathon Oil                                                               
owning the remaining 30 percent.                                                                                                
                                                                                                                                
MR. CLARK said  ConocoPhillips has informed the  US Department of                                                               
Energy and  the Governor  of Alaska  of their  intent to  seek an                                                               
extension  to  the export  license  up  to  March 31,  2013.  The                                                               
request will be for existing  volumes of natural gas. No increase                                                               
in volume for  export will be requested for the  99 trillion btus                                                               
that was previous authorized; it is  only a request to extend the                                                               
time available  to export the  original volume.  No  extension in                                                               
volume will be requested.                                                                                                       
                                                                                                                                
The Kenai  facility provides about  $130 million per year  to the                                                               
state and  local economies.  The LNG  facility supports  about 60                                                               
direct  jobs  and  is  estimated  to  support  an  additional  50                                                               
indirect jobs; they account for  an estimated $17 million/year in                                                               
personal income.                                                                                                                
                                                                                                                                
3:39:14 PM                                                                                                                    
CO-CHAIR MCGUIRE said this export license  is the only one in the                                                               
United States  and many  of them had  written letters  to bolster                                                               
the support for this extension.                                                                                                 
                                                                                                                                
SENATOR WAGONER asked if he meant billion instead of trillion.                                                                  
                                                                                                                                
MR. CLARK answered  the correct authorized amount  is 99 trillion                                                               
btus,  which is  equivalent  to  99 bcf.  He  continued that  the                                                               
production of gas for feedstock to  the LNG facility and the sale                                                               
of LNG  generate about  $60 million/year  in royalties  and taxes                                                               
for  the  State  of  Alaska  and  the  Kenai  Peninsula  Borough.                                                               
Furthermore,  continued  operation  of  the LNG  plant  helps  to                                                               
bridge the  gas to  the time  when local  storage options  can be                                                               
expanded or  until other sources  of natural gas  including North                                                               
Slope natural gas becomes available to South Central Alaska.                                                                    
                                                                                                                                
Additionally, it is important to  note the plant has provided and                                                               
can  continue  to provide  an  invaluable  service to  the  South                                                               
Central gas  market. The plant  owners have diverted  natural gas                                                               
to  local utility  markets when  unexpected supply  interruptions                                                               
occur or  when peak winter  demands are excessive.  The continued                                                               
operation   of  the   plant  allows   for  a   stable  production                                                               
environment  which will  significantly reduce  the risk  of water                                                               
influx  and  associated  loss   of  reserves  and  deliverability                                                               
associated  with the  shut-in of  production.  He explained  that                                                               
during the summer and winter  shoulder seasons the utility market                                                               
can't absorb the  natural gas production the Cook  Inlet Basin is                                                               
capable   of   producing.   However,  during   the   winter   and                                                               
specifically  during cold  spells,  when demand  increases up  to                                                               
three-fold, the  deliverability of the  basin is matched  or even                                                               
outstripped by  utility demand.  Shutting-in producing  gas wells                                                               
can  damage the  reservoirs and  cause the  loss of  reserves and                                                               
deliverability  resulting  in   reduced  supply  for  residential                                                               
needs.                                                                                                                          
                                                                                                                                
He summarized that  in addition to jobs and  a healthier economy,                                                               
continued  operation  of the  plant  means  natural gas  will  be                                                               
available for local  utility providers to meet  heat and electric                                                               
demands.  In  the  event  of   supply  interruptions  because  of                                                               
excessive  peak  demand, discontinued  use  of  the LNG  facility                                                               
would actually mean  that less natural gas would  be available to                                                               
meet utility and residential needs.                                                                                             
                                                                                                                                
3:43:10 PM                                                                                                                    
SENATOR  FRENCH said  many constituents  are not  happy with  the                                                               
idea of exporting  natural gas. He asked him to  explain why that                                                               
is a good thing  and to tell them exactly how  much gas sells for                                                               
overseas.                                                                                                                       
                                                                                                                                
MR. CLARK  replied that the  primary reason  it's a good  idea to                                                               
continue exports  is because of  the significant swing  in demand                                                               
from  summer (low)  to winter  (high).  If there  were no  export                                                               
market,  wells would  have to  be shut  in, which  would lead  to                                                               
water influx and  other failures on the well. So  even though gas                                                               
is physically  leaving the  state, it  allows that  production to                                                               
continue  and be  maintained at  a high  deliverability rate,  so                                                               
when it's  needed it can  simply be diverted. In  previous years,                                                               
the  excess deliverability  of gas  generated jobs  and increased                                                               
revenues.                                                                                                                       
                                                                                                                                
He said  current sales prices  are strong;  in Japan it  is about                                                               
$11/mmbtu. For contrast,  this year Enstar's average  cost of gas                                                               
is about $7/mmbtu.                                                                                                              
                                                                                                                                
SENATOR FRENCH  said the persistent  rumor is that the  gas being                                                               
sold in Japan  is selling for less than what  is being charged in                                                               
the Anchorage area and he asked  Mr. Clark to reassure folks that                                                               
is not the case.                                                                                                                
                                                                                                                                
3:45:16 PM                                                                                                                    
MR. CLARK  said, with the exception  of a handful of  months over                                                               
past 40  years, the  price for  gas delivered  to Japan  has been                                                               
higher.                                                                                                                         
                                                                                                                                
SENATOR WAGONER  asked when gas  is regasified in Japan,  does it                                                               
get blended for a higher btu value.                                                                                             
                                                                                                                                
MR. CLARK  replied that  the exported Kenai  gas is  considered a                                                               
lean LNG (1000 buts/cu.  ft.). It has to go to  a specific set of                                                               
tanks and once it is regasified it is blended into their system.                                                                
                                                                                                                                
3:46:37 PM                                                                                                                    
CO-CHAIR MCGUIRE asked  what process Alaskans should  look for to                                                               
weigh  in to  support the  extension. Is  there a  public comment                                                               
period?                                                                                                                         
                                                                                                                                
MR. CLARK  replied that their  current timeline is to  submit the                                                               
application to  the US Department  of Energy  by the end  of May;                                                               
then they  will start  the process which  will include  a comment                                                               
period.                                                                                                                         
                                                                                                                                
3:47:27 PM                                                                                                                    
CO-CHAIR MCGUIRE  asked if they  have considered  plans regarding                                                               
how the LNG plant might fit into in-state gas line plans.                                                                       
                                                                                                                                
MR.  CLARK answered  for long-term  continued use  of the  plant,                                                               
which is what  he thinks it would be, the  compression would have                                                               
to  be renewed  and that  requires considerable  investment -  as                                                               
much as a new facility would cost.                                                                                              
                                                                                                                                
3:48:46 PM                                                                                                                    
CO-CHAIR WIELECHOWSKI asked  if he thinks there is  enough gas in                                                               
Cook Inlet to sustain extension of this facility.                                                                               
                                                                                                                                
MR. CLARK replied  he thinks so. It is evident  to him there will                                                               
be  deliverability beyond  local  needs for  several years.  They                                                               
would only be exporting what is not needed locally.                                                                             
                                                                                                                                
CO-CHAIR  WIELECHOWSKI said  they  have heard  there  could be  a                                                               
potential crisis in  Cook Inlet, and possible  brown-outs. Did he                                                               
believe that?                                                                                                                   
                                                                                                                                
MR.  CLARK  replied  that  supply  volumes  have  been  declining                                                               
"pretty  significantly."  There  could  be  problems  during  the                                                               
coldest days;  all systems would  have to work optimally  to meet                                                               
demand,  but that  would be  only  a few  days out  of the  year.                                                               
Stable production is what is important to meeting those demands.                                                                
                                                                                                                                
CO-CHAIR WIELECHOWSKI  asked if  compressor failure  could happen                                                               
on the colder days.                                                                                                             
                                                                                                                                
3:50:49 PM                                                                                                                    
MR. CLARK  replied yes, that  is possible. A major  failure would                                                               
be a major concern.                                                                                                             
                                                                                                                                
CO-CHAIR WIELECHOWSKI asked who owns  the compressors and if they                                                               
will they be upgraded.                                                                                                          
                                                                                                                                
MR.  CLARK replied  that  the 15  or so  producing  wells in  the                                                               
Beluga Unit that  delivers to Chugach or Enstar  flow through the                                                               
central compressor there. If that failed  it would be a big deal,                                                               
but  they have  backup  compressors. A  few  minutes delay  could                                                               
occur between events which can  create loss in pressure, but that                                                               
would  be  temporary.  He  didn't  know  what  compression  other                                                               
producers had.                                                                                                                  
                                                                                                                                
3:52:20 PM                                                                                                                    
CO-CHAIR WIELECHOWSKI referenced the  "waterfall chart" and asked                                                               
if there are  enough reserves in Cook Inlet to  last for years to                                                               
come.                                                                                                                           
                                                                                                                                
MR. CLARK  replied that  there is enough  for several  years; the                                                               
questions come  up around deliverability. Those  really cold days                                                               
require things to work very smoothly.                                                                                           
                                                                                                                                
CO-CHAIR  WIELECHOWSKI said  ConocoPhillips agreed  to drill  new                                                               
wells in  the last extension  and asked  what the result  of that                                                               
was as well as their plans  to drill more wells if this extension                                                               
is granted.                                                                                                                     
                                                                                                                                
MR.  CLARK  replied that  ConocoPhillips  proposed  to drill  two                                                               
wells at Beluga River when they  got the last extension, and they                                                               
did so  in 2008. They also  drilled another well at  Beluga River                                                               
in 2009  and three  wells at  the north Cook  Inlet unit.  All of                                                               
those  wells  with  the  exception of  one  are  producing  "good                                                               
volumes."                                                                                                                       
                                                                                                                                
3:54:31 PM                                                                                                                    
CO-CHAIR  WIELECHOWSKI  asked  if  he  sees  the  need  to  drill                                                               
additional wells and if he anticipates doing so.                                                                                
                                                                                                                                
MR. CLARK  replied that they  are not  seeking to add  volumes to                                                               
export,  and didn't  see a  need  to tie  additional drilling  to                                                               
that. The  contracts that are  signed to  sell gas, whether  to a                                                               
utility or  to a  buyer in  Japan, are what  works best  to drive                                                               
drilling activity.                                                                                                              
                                                                                                                                
CO-CHAIR  WIELECHOWSKI asked  if  they get  this extension  would                                                               
they have adequate storage in Cook Inlet.                                                                                       
                                                                                                                                
MR. CLARK replied  that the LNG plant provides  a virtual storage                                                               
because of  the ability to  divert gas  away from the  plant, but                                                               
for the long  term benefit of Cook  Inlet, additional underground                                                               
storage is  needed. When  that is  in place,  it will  be another                                                               
tool that will allow steady production.                                                                                         
                                                                                                                                
CO-CHAIR WIELECHOWSKI asked  what cost is per mcf  to extract the                                                               
gas and deliver it.                                                                                                             
                                                                                                                                
MR. CLARK answered that information is proprietary.                                                                             
                                                                                                                                
CO-CHAIR  WIELECHOWSKI asked  if  more incentives  are needed  to                                                               
spur more gas storage facilities in Cook Inlet.                                                                                 
                                                                                                                                
MR.  CLARK  replied that  incentives  could  be helpful,  but  he                                                               
didn't know if any particular incentive would spur that.                                                                        
                                                                                                                                
CO-CHAIR WIELECHOWSKI asked if new  incentives are needed to spur                                                               
exploration.                                                                                                                    
                                                                                                                                
MR. CLARK  replied that  any incentives  that could  help improve                                                               
the economics of  wells would be helpful, but  the real challenge                                                               
is the size of the market.                                                                                                      
                                                                                                                                
3:57:49 PM                                                                                                                    
CO-CHAIR  WIELECHOWSKI asked  if ConocoPhillips  pays around  $60                                                               
million/year in royalty and taxes.                                                                                              
                                                                                                                                
MR. CLARK answered yes.                                                                                                         
                                                                                                                                
CO-CHAIR  WIELECHOWSKI asked  how much  their overall  taxes were                                                               
diluted with the "dilution effect of gas."                                                                                      
                                                                                                                                
MR. CLARK answered that he didn't know that answer.                                                                             
                                                                                                                                
CO-CHAIR MCGUIRE asked how many  people are currently employed at                                                               
the plant.                                                                                                                      
                                                                                                                                
MR. CLARK replied about 30  ConocoPhillips personnel at the plant                                                               
itself.                                                                                                                         
                                                                                                                                
CO-CHAIR MCGUIRE asked where they are  in the life cycle of their                                                               
Japan contract.                                                                                                                 
                                                                                                                                
MR.  CLARK  replied  that  the contract  they  are  currently  in                                                               
matched up  with the current  two-year extension. To  move beyond                                                               
March 31, 2011 will require this  contract to be amended or a new                                                               
contract.                                                                                                                       
                                                                                                                                
CO-CHAIR WIELECHOWSKI said he knows  the Regulatory Commission of                                                               
Alaska (RCA)  is concerned that  the state had agreed  to support                                                               
their  last  extension,  because  they thought  it  weakened  the                                                               
utilities'  ability   to  negotiate  a  contract.   He  asked  if                                                               
ConocoPhillips  has  contracts  with  all  of  the  utilities  to                                                               
provide gas  and what  was their  intent to  provide gas  to them                                                               
before meeting the need for the export license.                                                                                 
                                                                                                                                
MR. CLARK replied  that Chugach had just submitted  a contract to                                                               
the  RCA  last week  that  will  meet  their needs  through  this                                                               
period. Enstar has not yet  submitted a contract that meets their                                                               
needs,  but he  understood that  they will  this week.  He didn't                                                               
know  if  it  would  cover  all   of  their  needs,  but  it  was                                                               
progressing that way.                                                                                                           
                                                                                                                                
4:00:59 PM                                                                                                                    
CO-CHAIR  WIELECHOWSKI said  as long  as they  can meet  in-state                                                               
needs and  get affordable gas to  the consumers of Cook  Inlet he                                                               
is in full support of the extension.                                                                                            
                                                                                                                                
CO-CHAIR  MCGUIRE   remarked  that   they  are  excited   at  his                                                               
announcement and  look forward to  helping in the  explanation to                                                               
the public that has been challenging.                                                                                           
                                                                                                                                
4:02:12 PM                                                                                                                    
KAREY LOCKHART, Marathon  Oil, said Mr. Clark  covered the issues                                                               
adequately and she had no further comments.                                                                                     
                                                                                                                                
         HB 210-IZEMBEK STATE GAME REFUGE LAND EXCHANGE                                                                     
                                                                                                                                
4:02:25 PM                                                                                                                    
CO-CHAIR  MCGUIRE   announced  consideration  of  HB   210  [CSHB
210(RES) was before the committee].                                                                                             
                                                                                                                                
REPRESENTATIVE EDGMON,  sponsor of HB  210, said this  bill deals                                                               
with  a  much  publicized  effort to  establish  a  30-mile  road                                                               
between the communities of King  Cove and Cold Bay. It authorizes                                                               
the   Department  of   Natural  Resources   (DNR)  to   make  the                                                               
transaction given that the actual  land exchange with the federal                                                               
government is  of unequal  values. Title 38  requires the  DNR to                                                               
authorize  land  transactions  of   that  nature.  Submerged  and                                                               
tidelands  are involved  as part  of the  overall transaction  as                                                               
well; so the department needs to be able to consummate that.                                                                    
                                                                                                                                
With the  passage of HB 210,  he said, further work  will need to                                                               
be done at  the federal level to complete  the full authorization                                                               
for  the construction  of  the small  part of  the  road that  is                                                               
missing.  The  Department  of  Interior   would  need  to  do  an                                                               
environmental impact study (EIS) and a public interest finding.                                                                 
                                                                                                                                
He explained that the proposed  route goes through about 10 miles                                                               
of some bird  migration and wilderness areas, which  will have to                                                               
be approved.  He said  the most harrowing  10 minute  flight he's                                                               
ever taken  is from  Cold Bay to  King Cove. With  the help  of a                                                               
hover craft  in the last  couple of years, transport  between the                                                               
two areas  is easier,  but it  is very expensive  and as  well as                                                               
cumbersome  to  keep  the  hover   craft  running.  For  the  750                                                               
residents at King Cove this  is about accessing the fifth largest                                                               
all-weather  runway  in  the  state   that  also  happens  to  be                                                               
straddled by both the Gulf of  Alaska and the Bering Sea. So, for                                                               
them this is a life and safety issue.                                                                                           
                                                                                                                                
4:08:12 PM                                                                                                                    
CO-CHAIR MCGUIRE confirmed that she  has been contacted by people                                                               
from that area  who are concerned, and she  applauded his efforts                                                               
to deal with this problem.                                                                                                      
                                                                                                                                
CO-CHAIR  WIELECHOWSKI  said he  can  understand  the health  and                                                               
safety issue, but this land  exchange is controversial because it                                                               
is  the first  time  it  has been  done  on  a national  wildlife                                                               
refuge. He asked what kind  of community outreach and involvement                                                               
process  it  had been  through,  and  was  it acceptable  to  all                                                               
parties.                                                                                                                        
                                                                                                                                
REPRESENTATIVE   EDGMON  answered   that  the   land  transaction                                                               
involves about  60,000 acres versus  the 206 acres  that comprise                                                               
the  very  narrow  one-lane transportation  corridor  that  would                                                               
complete  the road;  the US  Fish and  Wildlife Service  threw in                                                               
about  1,600  acres  off  of  Kodiak  Island  for  good  measure.                                                               
Converting  the National  Wildlife Refuge  into wilderness  areas                                                               
has been  going on since ANILKA  was established in 1980,  and it                                                               
has  been happening  without  any consultation  at  all with  the                                                               
community  members, fishermen,  the tribe  or the  city. So,  the                                                               
recent outreach effort has been unprecedented.                                                                                  
                                                                                                                                
SENATOR  WIELECHOWSKI   asked  if  most  of   the  organizations,                                                               
particularly  environmental,   have  accepted  this  as   a  fair                                                               
compromise.                                                                                                                     
                                                                                                                                
REPRESENTATIVE  EDGMON replied  that  the  National Public  Lands                                                               
Bill that was passed  in March of last year took  a great deal of                                                               
effort including that of the  Alaska delegation. Certainly, there                                                               
was opposition  to it.  But many  sideboards were  enacted around                                                               
the construction of  the road - a single-lane  gravel road, steel                                                               
cables on both sides, specified  turnouts, and a road design that                                                               
has to  meet the  EIS. Further sideboards  are the  state process                                                               
and public interest finding.                                                                                                    
                                                                                                                                
4:12:04 PM                                                                                                                    
STANLEY  MACK,  Mayor, Aleutian  Seas  Borough,  Alaska, said  he                                                               
lives in Sand Point, but also lived  in Cold Bay for years. He is                                                               
a  commercial fisherman  and supported  HB 210.  It is  the final                                                               
step in a  long legislative process authorizing a  trade of state                                                               
and  King Cove  Corporation  land to  the  federal government  in                                                               
exchange for approving a small  road through the Izembek National                                                               
Wildlife Refuge.                                                                                                                
                                                                                                                                
The road  corridor will allow for  a one-lane gravel road  so the                                                               
residents of King  Cover will finally have a  safe and dependable                                                               
access  to  Cold  Bay  Airport. Not  all  of  the  transportation                                                               
challenges can be resolved, but  King Cove's problem is different                                                               
because it can be solved. He  couldn't express how happy he is to                                                               
think  that  this  is  going   to  happen  in  his  lifetime.  It                                                               
represents  a  successful  partnership between  state  and  local                                                               
government to achieve.                                                                                                          
                                                                                                                                
4:16:25 PM                                                                                                                    
HENRY  MACK, Mayor,  King Cove,  Alaska, said  he supported  CSHB
210(RES). He said he had lived most  of his life in King Cove and                                                               
was a commercial fisherman for  40-plus years. This road has long                                                               
been  in  the  making  since  1976  when  they  first  adopted  a                                                               
resolution identifying the need.  King Cove's small plane airport                                                               
is unusable 30 to 40 percent of  the time due to high winds. This                                                               
will  resolve  the  problem  for  many  people  whose  lives  are                                                               
impacted by the lack of reliable access to the Cold Bay Airport.                                                                
                                                                                                                                
4:19:56 PM                                                                                                                    
DICK  MYLIUS,  Director,  Division  of Mining,  Land  and  Water,                                                               
Department of  Natural Resources (DNR),  said under AS  38.50 his                                                               
division is  responsible for conducting land  exchanges involving                                                               
state land and  they support this legislation. It  is before them                                                               
for  two reasons.  The first  one is  that AS  38.50.020 requires                                                               
legislative  approval  of land  exchanges  for  other than  equal                                                               
appraised fair market values and  secondly, one of the provisions                                                               
of this exchange  is that certain state tide  and submerged lands                                                               
would be added to the Izembek State Game Refuge.                                                                                
                                                                                                                                
He said a road  from King Cove to Cold Bay  has been talked about                                                               
for many years  and DNR's original Bristol Bay  area plan adopted                                                               
25  years ago  identified the  need for  this corridor.  Regional                                                               
transportation prepared  by the Department of  Transportation and                                                               
Public Facilities (DOTPF) has also  identified this need. Several                                                               
years  ago the  Aleutian Seas  Borough, City  of King  Cove, King                                                               
Cove  Village Corporation,  Governor's Office  and DNR  agreed to                                                               
revive  the   discussions  about   a  land  exchange   to  enable                                                               
construction  of the  road  and it  was  largely because  borough                                                               
leaders had found  that the hover craft was not  providing a safe                                                               
economical long-term  solution to  King Cove's access  needs. So,                                                               
the state, the borough, the city  and corporation met with the US                                                               
Fish and  Wildlife Service to  develop the land exchange  that is                                                               
before them now.                                                                                                                
                                                                                                                                
MR.  MYLIUS  said the  parties  all  recognize that  the  biggest                                                               
hurdle for  such a  land exchange would  be securing  approval of                                                               
the  Congress,  because  it involves  federal  wilderness  refuge                                                               
lands. The exchange legislation  was introduced by Lisa Murkowski                                                               
and Representative  Young in 2007;  Governor Palin  wrote letters                                                               
in support,  the state  testified before  the House  Committee on                                                               
Natural Resources  and the land  exchange which was  originally a                                                               
separate piece of legislation was  wrapped into the Omnibus lands                                                               
bill that  was considered late  in 2008,  and passed in  2009 and                                                               
signed into law by President Obama in March.                                                                                    
                                                                                                                                
In putting together  the exchange, he said it was  clear that due                                                               
to concerns  over the  unique wildlife  and wilderness  values of                                                               
the refuge that  a simple fair market value  would not adequately                                                               
address  the public's  and Congress'  concerns for  those values.                                                               
So, it was determine at the  start that the package would require                                                               
state legislative approval.  Statute already requires legislative                                                               
approval for  exchanges for  other than  an equal  appraised fair                                                               
market value.                                                                                                                   
                                                                                                                                
The  existing  values  of  most  of these  parcels  of  land  are                                                               
wilderness and  wildlife values which  are difficult  to quantify                                                               
in  a  land  appraisal,  and similarly  with  health  and  safety                                                               
concerns  of the  local  residents, the  primary  reason for  the                                                               
road.                                                                                                                           
                                                                                                                                
Acreage-wise the  exchange is clearly  skewed in favor of  the US                                                               
Fish and  wildlife Service. The state  will acquire approximately                                                               
206 acres in the road corridor  and about 1,600 acres on Sitkinak                                                               
Island; US  Fish and Wildlife  Service will acquire  43,000 acres                                                               
of  state  land that  will  be  added  to the  National  Wildlife                                                               
Refuge, 2,500 acres of Native  corporation land and another 5,430                                                               
acres   of   Native   corporation   selections   that   will   be                                                               
relinquished. In  addition, the King Cove  Native Corporation has                                                               
agreed  that it  will sell  additional land  to the  US Fish  and                                                               
Wildlife Service at  fair market value should  the service desire                                                               
to purchase that land.                                                                                                          
                                                                                                                                
In addition to the road corridor,  the state will acquire a 1,600                                                               
acre parcel on  Sitkinak Island which is located  south of Kodiak                                                               
Island; the remainder of that  island is already state or borough                                                               
land used  for grazing. The  1,600-acre parcel is a  former Coast                                                               
Guard facility.  The value of  the two townships the  state would                                                               
trade to  the US Fish  and Wildlife Service primary  is primarily                                                               
wildlife habitat  for fish, caribou  and brown bear.  These lands                                                               
drain the  western side of  Pavlov Volcano and have  been offered                                                               
for oil  and gas leasing in  previous state lease sales  but have                                                               
received no  bids. State geologists  say that the likely  oil and                                                               
gas resources lie further north or offshore of these parcels.                                                                   
                                                                                                                                
4:24:44 PM                                                                                                                    
MR. MYLIUS  said the  second provision  requires approval  by the                                                               
legislature for  adding 3,000 acres  of state tide  and submerged                                                               
lands in Kinzarof  Lagoon, at the head of Cold  Bay, to the state                                                               
game refuge. These lands have  resource values similar to Izembek                                                               
Lagoon including valuable eel grass  beds, which are critical for                                                               
water fowl  that migrate through or  reside in the area.  He said                                                               
the department and the governor support this legislation.                                                                       
                                                                                                                                
SENATOR  FRENCH  moved to  adopt  the  proposed Senate  committee                                                               
substitute (SCS)  to CSHB 210,  labeled 26-LS0788, Version  E, as                                                               
the working document of the  committee. There being no objection,                                                               
the motion carried and SCS CSHB 210() was before the committee.                                                                 
                                                                                                                                
TIM  CLARK,   staff  to  Representative  Edgmon,   explained  the                                                               
differences. He said the SCS is  comprised of three lines on page                                                               
5,  line 27,  that say:  "The construction  and operation  of the                                                               
road described in (b)(1) of  this section is authorized after the                                                               
state receives  the land described  in (b)(1) of this  section in                                                               
accordance  with PL11-11(Ombibus  Public Land  Management Act  of                                                               
2009)."                                                                                                                         
                                                                                                                                
The reason  for this  minor addition  was to  make it  clear that                                                               
construction and  use of the road  is allowed if the  exchange is                                                               
authorized. It is similar to  access provisions in existing state                                                               
law affecting  other state game refuges  including the Mendenhall                                                               
Wet Lands State Game Refuge and  the Goose Bay State Game Refuge.                                                               
What might not be immediately  clear is that the Izembek National                                                               
Refuge is  actually super-imposed  over a  state game  refuge, so                                                               
while the corridor  becomes state land, it  also becomes arguably                                                               
state game  refuge land. This  being similar to  other provisions                                                               
for access in  state game refuges they thought  it seemed prudent                                                               
to add it to the bill.                                                                                                          
                                                                                                                                
4:28:30 PM                                                                                                                    
MR.  CLARK said  it  is  rather complex  for  a seven-page  bill,                                                               
mainly  because this  bill answers  the three  mechanisms in  the                                                               
federal legislation that  can render the exchange  null and void:                                                               
a finding by  the Secretary of the Interior that  the exchange is                                                               
not in  the public  interest, a voluntary  rendering of  null and                                                               
void  by  the  state  or   the  Native  Corporation  made  before                                                               
construction  of the  road commenced,  and if  permitting of  the                                                               
road  was not  accomplished  within seven  years  of the  federal                                                               
act's passage. The  clock began in March 2009  when the President                                                               
signed the legislation.  The challenging structure is  if for any                                                               
reason  the exchange  is  voided,  there is  no  need to  revisit                                                               
statute to ensure  that all involved lands are  returned to their                                                               
original status. But if that is  not the case, the legislature is                                                               
saved the  trouble of having to  convene to dismantle any  of the                                                               
transactions.                                                                                                                   
                                                                                                                                
CO-CHAIR  MCGUIRE, finding  no  further  comments, closed  public                                                               
testimony and set the bill aside.                                                                                               
                                                                                                                                
4:31:54 PM                                                                                                                    
At ease from 4:31-4:33.                                                                                                         
                                                                                                                                
          HJR 40-COOK INLET/KACHEMAK BELUGA POPULATION                                                                      
                                                                                                                                
4:33:07 PM                                                                                                                    
CO-CHAIR MCGUIRE brought the meeting  back to order and announced                                                               
consideration   of  HJR   40  [CSHJR   40(RES)  was   before  the                                                               
committee].                                                                                                                     
                                                                                                                                
REPRESENTATIVE MILLETT,  sponsor of HJR 40,  said this resolution                                                               
opposes  the   proposed  designation   by  the   National  Marine                                                               
Fisheries  Service (NMFS)  of 3,000  square miles  of upper  Cook                                                               
Inlet as  a critical Beluga  habitat area. She said  the critical                                                               
habitat designation is  part of the Endangered  Species Act (ESA)                                                               
process, and  the Belugas were  designated as  endangered species                                                               
in  October  2008.  The ESA  requires  consideration  of  listing                                                               
endangered  species   habitat  as  critical  habitat.   The  NMFS                                                               
designated the  whole 3,000  square miles  from Upper  Cook Inlet                                                               
all the way  down to Homer as Beluga habitat,  and HJR 40 opposes                                                               
that as being excessive.                                                                                                        
                                                                                                                                
REPRESENTATIVE  MILLETT   explained  that  the  ESA   allows  for                                                               
economic  consequences   in  considering  the   critical  habitat                                                               
listing and she believes the  NMFS grossly underestimated that at                                                               
$600,000.  Instead she  said  this  critical habitat  designation                                                               
would encompass everything from the  Port of Anchorage to fishing                                                               
grounds outside  of Homer  and Kenai to  oil and  gas exploration                                                               
and any type  of construction or resource  development that would                                                               
take place across the Inlet,  which would jeopardize not only Mt.                                                               
Spurr, but Chakachamna/Susitna and coal gasification projects.                                                                  
                                                                                                                                
She  learned that  the  west side  of Cook  Inlet  was listed  as                                                               
critical  habitat and  there  had  been only  one  sighting of  a                                                               
Beluga whale  there in the  last 10  years. Also, she  said, NMFS                                                               
only  counts them  once a  year by  doing an  aerial flight,  and                                                               
juvenile Belugas  aren't counted  because they  are the  color of                                                               
mud and look like waves.                                                                                                        
                                                                                                                                
REPRESENTATIVE  MILLETT said  this  listing  would also  severely                                                               
limit the  products that can come  into Anchorage as well  as oil                                                               
and  gas  exploration  in  Cook  Inlet.  All  three  of  Alaska's                                                               
delegation  oppose  this designation  and  that  she entered  the                                                               
resolution during the NMFS public comment period.                                                                               
                                                                                                                                
She said  back in  the 1990s  a subsistence  hunt took  place not                                                               
realizing there  was a delicate  balance between  the subsistence                                                               
harvest and the  Beluga population. In 1998  a harvest management                                                               
plan was  established and  since then the  Belugas have  shown an                                                               
increase in numbers. The NMFS has  stated that the reason for the                                                               
decline was overharvesting.                                                                                                     
                                                                                                                                
4:37:58 PM                                                                                                                    
SENATOR  FRENCH  asked  her  what  she thinks  would  be  a  more                                                               
reasonable designation.                                                                                                         
                                                                                                                                
REPRESENTATIVE  MILLETT  said there  is  no  opportunity to  have                                                               
public comment and  she is not a  biologist; it is a  tool of the                                                               
NMFS. She  believes the  west side  of Cook  Inlet should  not be                                                               
included.                                                                                                                       
                                                                                                                                
SENATOR FRENCH  asked if she  thinks the  west side of  the Inlet                                                               
should be excluded.                                                                                                             
                                                                                                                                
REPRESENTATIVE  MILLETT said  her preference  is no  designation.                                                               
She  believes   the  Belugas  "are   coming  back"   because  the                                                               
subsistent hunts are  done, and it will take them  a little while                                                               
to rebound.  The NMFS has said  it will take 10-15  years to have                                                               
the   population  increase.   She  believed   having  a   harvest                                                               
management plan  in place with  a take of  two Belugas a  year is                                                               
already working well enough.                                                                                                    
                                                                                                                                
SENATOR FRENCH said  he heard a good presentation  by Jason Brune                                                               
[executive director,  Rural Development Corporation  (RDC)] about                                                               
this a few years ago, and  he wondered what the population was in                                                               
the 1980s when the subsistence harvest took place.                                                                              
                                                                                                                                
4:40:19 PM                                                                                                                    
REPRESENTATIVE  MILLETT  answered   that  the  Beluga  population                                                               
started out at 1,300 in the 80s,  in 1994 it was 653, and in 1998                                                               
it was 347, which is when  the subsistence harvest took place. In                                                               
2004 the  population was  366, in  2005 it was  278, and  in 2009                                                               
they rebounded to 321. There has  not been a 2010 count yet. They                                                               
have increased  by an average of  about 4 percent per  year since                                                               
the subsistence management plan was put in place.                                                                               
                                                                                                                                
SENATOR FRENCH  said it sounds like  part of the problem  is that                                                               
NMFS  only does  one count  a year.  He asked  if they  should be                                                               
appropriating more money to count Beluga whales more often.                                                                     
                                                                                                                                
REPRESENTATIVE  MILLETT  replied  that  she  has  asked  NMFS  to                                                               
increase  its  counts  and to  include  juveniles,  although  she                                                               
doubts she has much influence.                                                                                                  
                                                                                                                                
SENATOR WAGONER said he fished that  Inlet for the better part of                                                               
40 years,  and some years  you would see  a lot of  Belugas, some                                                               
years you  wouldn't. The only  place you  could count them  is in                                                               
lower Cook Inlet  and the only time you could  count them is when                                                               
the food is  in. For the scientists to say  this is a sub-species                                                               
is  something he  doesn't believe.  As for  the numbers,  if they                                                               
studied the  food source, they  could get  a good idea  about how                                                               
many Belugas are going to be there.                                                                                             
                                                                                                                                
4:43:27 PM                                                                                                                    
CO-CHAIR MCGUIRE  said this  is just  another way  the Endangered                                                               
Species  Act is  being used  by the  federal government,  and she                                                               
hoped they  would depend on  the state  in which they  are making                                                               
the designation for their data.                                                                                                 
                                                                                                                                
4:44:20 PM                                                                                                                    
JASON  BRUNE,  Executive   Director,  Rural  Development  Council                                                               
(RDC),  said  he concurred  with  Senator  Wagoner's and  Senator                                                               
French's statements and that he supported HJR 40.                                                                               
                                                                                                                                
CO-CHAIR MCGUIRE asked  him to provide his  written comments. She                                                               
closed public testimony and set HJR 40 aside.                                                                                   
                                                                                                                                
           HJR 26-STATEHOOD/ANCSA LAND SURVEY FUNDING                                                                       
                                                                                                                                
4:45:27 PM                                                                                                                    
CO-CHAIR MCGUIRE announced consideration of HJR 26.                                                                             
                                                                                                                                
CRYSTAL KOENEMAN,  aide to Representative Fairclough,  sponsor of                                                               
HJR 26, said  at statehood Alaska was granted  a land entitlement                                                               
from the  federal government of approximately  103 million acres.                                                               
Alaska Natives,  through the Alaska Native  Claims Settlement Act                                                               
(ANSCA),  were  granted  a  land  entitlement  from  the  federal                                                               
government  of  45  million acres.  Currently,  Congress  is  not                                                               
sufficiently budgeting the enough funds  to the US Bureau of Land                                                               
Management for  the timely completion  of land surveys  for lands                                                               
that were promised to the Natives  in the State of Alaska. It was                                                               
supposed to be done by  the 50th statehood anniversary, which has                                                               
come and gone.                                                                                                                  
                                                                                                                                
4:47:08 PM                                                                                                                    
CO-CHAIR MCGUIRE noted that there is an amendment in the packet                                                                 
and asked if she supported it.                                                                                                  
                                                                                                                                
MS. KOENEMAN answered absolutely, and that the amendment had                                                                    
updated numbers since the resolution was first introduced last                                                                  
year.                                                                                                                           
                                                                                                                                
CO-CHAIR MCGUIRE moved to adopt Amendment 1.                                                                                    
                                                                                                                                
                                                 26-LS0739\R.2                                                                  
                                                      Bullock                                                                   
                                                                                                                                
                          AMENDMENT 1                                                                                       
                                                                                                                                
     OFFERED IN THE SENATE                                                                                                      
                                                                                                                                
     Page 2, line 8:                                                                                                            
          Delete "December 31, 2008, more than 66,000,000"                                                                      
          Insert "January 31, 2010, more than 57,000,000"                                                                       
                                                                                                                                
     Page 2, line 9:                                                                                                            
          Delete "40,000,000"                                                                                                   
          Insert "42,000,000"                                                                                                   
                                                                                                                                
     Page 2, line 10:                                                                                                           
          Delete "14,000,000"                                                                                                   
          Insert "15,000,000"                                                                                                   
                                                                                                                                
     Page 2, line 11:                                                                                                           
          Delete "12,000,000"                                                                                                   
          Insert "7,000,000"                                                                                                    
                                                                                                                                
There being no objection, the motion carried.                                                                                   
                                                                                                                                
CO-CHAIR WIELECHOWSKI asked what the importance is of getting a                                                                 
land patent.                                                                                                                    
                                                                                                                                
MS. KOENEMAN replied that she would get an official response                                                                    
back to him, but it makes the land transfers easier.                                                                            
                                                                                                                                
4:48:52 PM                                                                                                                    
CO-CHAIR MCGUIRE finding no further testimony, closed public                                                                    
testimony and held HJR 26 as amended.                                                                                           
                                                                                                                                
        HCR 10-OPPOSE FED. CONTROL OF STATE LAND & WATER                                                                    
                                                                                                                                
4:49:20 PM                                                                                                                    
CO-CHAIR  MCGUIRE  announced  consideration   of  HCR  10  [CSCHR
10(RES) was before the committee].                                                                                              
                                                                                                                                
4:49:30 PM                                                                                                                    
REPRESENTATIVE HAWKER, sponsor  of HCR 10, said  the issue behind                                                               
this resolution was brought to him  by a constituent and is about                                                               
the  state's  ownership  of its  submerged  lands  and  navigable                                                               
waters. It  is something that  is guaranteed by law,  the state's                                                               
constitution, and  subsequent interpretations  unless there  is a                                                               
specific federal override.                                                                                                      
                                                                                                                                
He explained that back in  1996 the National Park Service started                                                               
adopting regulations  which improperly  extend its own  claims of                                                               
management   and   enforcement   authorities   over   state-owned                                                               
navigable waters  within the units  of the National  Park System.                                                               
As  evidence  he  offered  a letter  from  the  Alaska  Citizen's                                                               
Advisory Commission  on Federal  Areas, dated February  13, 2009.                                                               
The  Commission identified  and analyzed  this problem  and asked                                                               
the  governor  to file  a  lawsuit  challenging the  regulations.                                                               
Senator Therriault  and Senator Bunde were  potential sponsors of                                                               
legislation - one of which is  gone and the other one almost gone                                                               
- so it fell to him to offer it.                                                                                                
                                                                                                                                
REPRESENTATIVE HAWKER  said the  Commission recognizes  the state                                                               
is done  with attempts at  administrative remedies and  wanted to                                                               
go to court  for a legal remedy. That language  was toned down in                                                               
the resolution, and  it now asks the administration  to "take all                                                               
available actions".                                                                                                             
                                                                                                                                
SENATOR FRENCH asked if there  is an interplay between this issue                                                               
and the Katie John case.                                                                                                        
                                                                                                                                
4:54:51 PM                                                                                                                    
DICK  MYLIUS,  Director,  Division  of Mining,  Land  and  Water,                                                               
Department  of Natural  Resources (DNR),  replied generally  not.                                                               
They both  deal with  navigable waters, but  the Katie  John case                                                               
deals with  federal reserve  water rights and  this deals  with a                                                               
park service regulation.                                                                                                        
                                                                                                                                
SENATOR FRENCH asked if anyone else might have any more to add.                                                                 
                                                                                                                                
TINA  CUNNING,   Subsistence  and  Federal   Issues  Coordinator,                                                               
Department of  Fish and Game  (ADF&G), agreed HCR 10  has nothing                                                               
to  do with  the  Katie John  case,  which has  to  do with  only                                                               
locating where the federal subsistence  priority applies in state                                                               
waters. The National Park Service  regulations issue is an ANILCA                                                               
case related  to where federal  regulations that  are promulgated                                                               
for  the management  of federal  lands can  apply off  of federal                                                               
lands onto state waters.                                                                                                        
                                                                                                                                
CO-CHAIR  MCGUIRE  adjourned  and  then  immediately  called  the                                                               
meeting back to order to allow Mr. Sturgeon to testify.                                                                         
                                                                                                                                
4:56:55 PM                                                                                                                    
JOHN STURGEON, representing himself,  supported CSHCR 10. He said                                                               
the  State  of Alaska  owns  its  submerged lands  designated  as                                                               
"navigable."  This includes  rivers  such as  the Yukon.  Several                                                               
years ago  when he was  hunting on the  Yukon, he was  stopped by                                                               
the National Park Service police and  was told he could not drive                                                               
his  5X10 ft.  hover craft  down the  Yukon. They  said they  had                                                               
legal  jurisdiction even  though they  admitted he  was on  state                                                               
land. Later,  when he returned  to Anchorage he learned  that the                                                               
state  constitution,  the  statutes,  and  regulations  all  very                                                               
clearly say the  State of Alaska has management  authority on its                                                               
navigable waters. In addition, he  learned that Section 103(c) of                                                               
ANILCA says on ANILCA designated  units federal conservation unit                                                               
regulations do  not apply to  state and  private land. It  was an                                                               
ANILCA promise that was ignored. He  said it is of little use for                                                               
the  State of  Alaska to  own  its submerged  lands on  navigable                                                               
waterways if the  National Park Service is going  to override its                                                               
management.                                                                                                                     
                                                                                                                                
4:58:35 PM                                                                                                                    
CO-CHAIR MCGUIRE  closed public testimony  and set HCR  10 aside.                                                               
Finding no  further business  she adjourned  the meeting  at 4:59                                                               
p.m.                                                                                                                            
                                                                                                                                
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