03/15/2013 03:30 PM Senate RESOURCES
| Audio | Topic |
|---|---|
| Start | |
| HJR5 | |
| SB60 | |
| SB69 | |
| SB59 | |
| Adjourn |
+ teleconferenced
= bill was previously heard/scheduled
| + | SB 59 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| = | HJR 5 | ||
| = | SB 60 | ||
| = | SB 69 | ||
ALASKA STATE LEGISLATURE
SENATE RESOURCES STANDING COMMITTEE
March 15, 2013
3:32 p.m.
MEMBERS PRESENT
Senator Cathy Giessel, Chair
Senator Fred Dyson, Vice Chair
Senator Peter Micciche
Senator Click Bishop
Senator Anna Fairclough
Senator Hollis French
MEMBERS ABSENT
Senator Lesil McGuire
COMMITTEE CALENDAR
CS FOR HOUSE JOINT RESOLUTION NO. 5(FSH)
Opposing the United States Food and Drug Administration's
preliminary finding relating to genetically engineered salmon;
urging further examination of genetically engineered salmon;
opposing AquaBounty's petition to produce genetically engineered
salmon; and proposing, if AquaBounty's petition is approved,
that its product should be labeled as "genetically modified."
- MOVED CSHJR 5(FSH) OUT OF COMMITTEE
SENATE BILL NO. 60
"An Act relating to sea otter population management."
- MOVED SB 60 OUT OF COMMITTEE
SENATE BILL NO. 69
"An Act establishing the Alaska Chinook salmon research and
restoration endowment fund and relating to grants from the
fund."
- MOVED CSSB 69(RES) OUT OF COMMITTEE
SENATE BILL NO. 59
"An Act relating to approval for oil and gas or gas only
exploration and development in a geographical area; and
providing for an effective date."
- HEARD & HELD
PREVIOUS COMMITTEE ACTION
BILL: HJR 5
SHORT TITLE: OPPOSE GENETICALLY ENGINEERED SALMON
SPONSOR(s): REPRESENTATIVE(s) TARR
01/28/13 (H) READ THE FIRST TIME - REFERRALS
01/28/13 (H) FSH, RES
02/12/13 (H) FSH AT 10:00 AM CAPITOL 120
02/12/13 (H) Moved CSHJR 5(FSH) Out of Committee
02/12/13 (H) MINUTE(FSH)
02/13/13 (H) FSH RPT CS(FSH) 3DP 3NR
02/13/13 (H) DP: HERRON, KREISS-TOMKINS, SEATON
02/13/13 (H) NR: JOHNSON, GATTIS, OLSON
02/13/13 (H) RES REFERRAL WAIVED
02/20/13 (H) TRANSMITTED TO (S)
02/20/13 (H) VERSION: CSHJR 5(FSH)
02/21/13 (S) READ THE FIRST TIME - REFERRALS
02/21/13 (S) RES
03/13/13 (S) RES AT 3:30 PM BUTROVICH 205
03/13/13 (S) Heard & Held
03/13/13 (S) MINUTE(RES)
03/15/13 (S) RES AT 3:30 PM BUTROVICH 205
BILL: SB 60
SHORT TITLE: BOUNTY ON SEA OTTERS
SPONSOR(s): SENATOR(s) STEDMAN
02/20/13 (S) READ THE FIRST TIME - REFERRALS
02/20/13 (S) RES, JUD, FIN
03/13/13 (S) RES AT 3:30 PM BUTROVICH 205
03/13/13 (S) Heard & Held
03/13/13 (S) MINUTE(RES)
03/15/13 (S) RES AT 3:30 PM BUTROVICH 205
BILL: SB 69
SHORT TITLE: CHINOOK RESEARCH & RESTORATION ENDOWMENT
SPONSOR(s): SENATOR(s) OLSON
02/28/13 (S) READ THE FIRST TIME - REFERRALS
02/28/13 (S) RES, FIN
03/13/13 (S) RES AT 3:30 PM BUTROVICH 205
03/13/13 (S) Heard & Held
03/13/13 (S) MINUTE(RES)
03/15/13 (S) RES AT 3:30 PM BUTROVICH 205
BILL: SB 59
SHORT TITLE: OIL & GAS EXPLORATION/DEVELOPMENT AREAS
SPONSOR(s): RULES BY REQUEST OF THE GOVERNOR
02/19/13 (S) READ THE FIRST TIME - REFERRALS
02/19/13 (S) TTP, RES, FIN
02/26/13 (S) TTP AT 3:30 PM BUTROVICH 205
02/26/13 (S) Heard & Held
02/26/13 (S) MINUTE(TTP)
03/05/13 (S) TTP AT 3:30 PM BUTROVICH 205
03/05/13 (S) Moved SB 59 Out of Committee
03/05/13 (S) MINUTE(TTP)
03/06/13 (S) TTP RPT 2DP 1NR
03/06/13 (S) DP: MICCICHE, MCGUIRE
03/06/13 (S) NR: GARDNER
03/15/13 (S) RES AT 3:30 PM BUTROVICH 205
WITNESS REGISTER
JERRY MCCUNE, lobbyist
Cordova District Fishermen United
Cordova, Alaska
POSITION STATEMENT: Supported HJR 5. Did not support SB 60,
because it would be illegal and there are other ways to address
the sea otter issue.
HEATH HILLYARD, lobbyist
Southeast Alaska Guides Organization (SEAGO)
Sitka, Alaska
POSITION STATEMENT: Supported HJR 5.
JAMES SULLIVAN, lobbyist
Southeast Alaska Conservation Council (SEACC)
Juneau, Alaska
POSITION STATEMENT: Did not support SB 60 as written because it
conflicts with Section 109(a) of the Marine Mammal Protection
Act.
ROSITA WORL, President
Sealaska Heritage Institute (SHI)
Juneau, Alaska
POSITION STATEMENT: Supported the idea of the state helping to
develop an industry around using sea otter pelts rather than the
concept in SB 60.
LEE KADINGER, COO
Sealaska Heritage Institute (SHI)
Juneau, Alaska
POSITION STATEMENT: Did not support SB 60, but believed the
state could help support various other programs like the sea
otter project.
GREG BROWN, representing himself
Juneau, Alaska
POSITION STATEMENT: Did not support SB 60 saying that the future
of the shellfish industry doesn't look good and it has nothing
to do with sea otters; it has to do with ocean acidification and
the ability to calcify their shells.
TINA BROWN, representing herself
Juneau, Alaska
POSITION STATEMENT: Opposed SB 60.
KATHY HANSON, Executive Director
Southeast Alaska Fishermen's Alliance (SEAFA)
Juneau, Alaska
POSITION STATEMENT: Supported SB 60.
MAX WORHATCH, representing himself
Petersburg, Alaska
POSITION STATEMENT: Supported SB 60.
SENATOR STEDMAN
Alaska State Legislature
Juneau, AK
POSITION STATEMENT: Sponsor of SB 60.
DAVID SCOTT
Staff to Senator Olson
Alaska State Legislature
Juneau, AK
POSITION STATEMENT: Commented on SB 59 for the sponsor.
DAN SULLIVAN, Commissioner
Department of Natural Resources (DNR)
Juneau, Alaska
POSITION STATEMENT: Provided an overview of SB 59.
BILL BARRON, Director
Division of Oil and Gas
Department of Natural Resources (DNR)
POSITION STATEMENT: Explained the department's concepts in SB
59.
WENDY WOOLF, Office Assistant
Division of Oil and Gas
Department of Natural Resources (DNR)
Juneau, Alaska
POSITION STATEMENT: Explained the current process of department
approvals for oil and gas exploration and development involving
SB 59.
JAMES SULLIVAN, lobbyist
Southeast Alaska Conservation Council (SEACC)
Juneau, Alaska
POSITION STATEMENT: Had concerns about SB 59.
ACTION NARRATIVE
3:32:01 PM
CHAIR CATHY GIESSEL called the Senate Resources Standing
Committee meeting to order at 3:32 p.m. Present at the call to
order were Senators Dyson, Fairclough, French, Bishop, Micciche
and Chair Giessel.
HJR 5-OPPOSE GENETICALLY ENGINEERED SALMON
3:32:43 PM
CHAIR GIESSEL announced HJR 5 to be up for consideration. [CSHJR
5(FSH) was before the committee.]
3:32:48 PM
JERRY MCCUNE, lobbyist, Cordova District Fishermen United,
Cordova, Alaska, supported HJR 5. They are totally against
genetically modified fish and want it labeled if it's approved.
3:34:13 PM
HEATH HILLYARD, Southeast Alaska Guides Organization (SEAGO),
Sitka, Alaska, supported HJR 5.
3:35:10 PM
SENATOR DYSON moved to report HJR 5 from committee with attached
fiscal notes and individual recommendations.
CHAIR GIESSEL announced that, without objection, CSHJR 5(FSH)
passed from the Senate Resources Standing Committee.
SENATOR MICCICHE remarked that he had never heard a single
statement in support of genetically engineered salmon.
SB 60-BOUNTY ON SEA OTTERS
3:36:19 PM
CHAIR GIESSEL announced SB 60 to be up for consideration, and
noted that public testimony would continue today.
3:37:06 PM
JAMES SULLIVAN, Southeast Alaska Conservation Council (SEACC),
Juneau, Alaska, said SEACC strongly supports the right of Alaska
Natives to hunt sea otters for subsistence purposes and for the
creating and selling of handicrafts and clothing as Section
101(b) of the Marine Mammal Protection Act (MMPA) allows. But SB
60, as written, conflicts with 109(a) of the MMPA that provides
that no state may enforce or attempt to enforce any state law or
regulation relating to the taking of any species of marine
mammal within the state unless the secretary has transferred
authority for the conservation and management of that species to
the state under Section 109(b)(1). SB 60 is impermissible
because the Secretary of the Interior has not granted the state
management authority under 109(b)(1) of the act.
Regardless of how the bill is currently written, he stated SEACC
believes that ecosystem-based management reliant on the best
available scientific information is the proper approach to
insure healthy and sustainable fisheries within the state of
Alaska. He said SEACC does not support any type of bounty
system, however written.
3:38:51 PM
ROSITA WORL, President, Sealaska Heritage Institute (SHI),
Juneau, Alaska, said she is also on the board of the Alaska
Federation of Natives and serves as the Chair of its Subsistence
Committee; she is also a Harvard trained anthropologist and has
done 30 years of research throughout Alaska and the Circumpolar
Arctic. So she has some knowledge of subsistence.
She introduced other members of the Institute who were all
wearing sea otter products and provided written testimony along
with a report on SHI's cultural and economic sustainability
through traditional arts that she would leave for them. It
provides an outline of their sea otter project and offers a
number of recommendations that could lessen their impacts on
commercial and subsistence resources.
MS. WORL said they appreciate the impacts from sea otters on the
commercial fisheries, and their own tribal members are advising
them of the impacts on subsistence resources. However, she was
concerned that this legislation was not the solution to the
reported impacts. It could ultimately, if it were found to be
legal and implemented, undermine their efforts to address the
impacts in a positive way and possibly threaten a sustainable
sea otter population.
She said from the onset that the harvest they are supporting
will be well within the presently known scientific potential of
a logical removal level from data provided by the Fish and
Wildlife Service and their harvests area are also initiated in
areas that are identified by the Alaska Division of Fish and
Game. In addition, they are governed by their own traditional
values: honoring and respecting the environment as they use the
resources, protecting the environment and the resources for
future generations, using traditional knowledge and
incorporating new or scientific knowledge into their practices.
Through the state of Alaska's support, she explained how SHI
expanded its sustainable arts program to include sea otter.
Basically, the project will support the harvest of 250 sea
otters annually over a three-year period and includes the
tanning of sea otter hides in an Alaskan tanner and the
instruction of skin sewing to 50 individuals. They believe that
this project can alleviate the impacts that are evident in their
region while at the same time providing revenues to individuals
in economically depressed communities who often have no other
alternative to gainful employment. It will also allow them to
revive ancient traditions that were near extinction as a result
of the decimation of the sea otter population under the Russian
occupation. She showed one of the hats that were just made in
one of their classes in Kake.
3:42:50 PM
LEE KADINGER, COO, Sealaska Heritage Institute (SHI), Juneau,
Alaska, said the "bounty bill" may not be the best vehicle and
that they believe there are other ways the state can help
support various programs like the sea otter project. One of the
issues they have been having is with the definition
"significantly altered;" for instance, some federal agents will
say his hat is not significantly altered, and the state's
resources could help them clarify that these items before them
are significantly altered and can enter the retail market. "Who
would start a business if you are always in fear that you would
be arrested for making a hat like this? And that's exactly what
the situation is," he said.
The $28,000 fiscal note would allow them to expand their project
and enter further communities - into the Aleutians up north, if
need be - and throughout Southeast Alaska to make a more
statewide presence.
Finally, Mr. Kadinger said they could expand the marketing of
sea otter products. From an economist's standpoint, rather than
pushing supply, they would pull it through larger demand; more
people interested in purchasing sea otter products would lead to
more sustainably harvested sea otters.
3:44:38 PM
SENATOR DYSON asked if there are areas in Southeast that they
don't utilize for harvesting 250 otters.
MS. WORL said the Alaska Department of Fish and Game (ADF&G)
identified Petersburg, Kake, and Yakutat as areas they thought
would be helpful to fishermen and other people, but they have
concentrated primarily in Yakutat. Harvesting is not allowed in
Glacier Bay, so that population is growing. It's also a matter
of recruiting hunters and they had not been as successful in
Kake where they would like to have a little more harvest as well
as in the Prince of Wales (POW) area.
SENATOR DYSON asked if they object to bounty hunters doing what
SHI is not able to do in areas where folks are not hunting at
all.
MS. WORL responded that they don't support bounty hunting.
According to their historical values and federal law, there has
to be some use of the animal.
SENATOR DYSON related that beaver are a problem in his area and
ADF&G would let people trap there, but the hides are not worth
enough to make it economic. So, people contribute a "bounty" to
incentivize trappers to get rid of the nuisance. Is she not open
to that type of management?
MS. WORLAND replied saying that she would have to go back to the
development of a market. A market can be created; they have
tested it successfully in Santa Fe, which is the largest Indian
market.
3:48:00 PM
SENATOR FRENCH said this issue is covered by federal law and
they struggle with how to increase the number of sea otters that
can be legally taken by Natives for subsistence purposes. What
is holding Native individuals back from taking more sea otters?
MS. WORL replied a couple of things; it is costly to go out and
hunt for one. They have introduced in federal legislation a
subsistence support production program that would help hunters
for food some security to offset the price of their oil. Her
program offers a potential solution if they can accept that the
scientific numbers will allow them to harvest an additional
1,300 sea otter. Those areas of abundance could be targeted.
3:49:24 PM
GREG BROWN, representing himself, Juneau, Alaska, said the
future of the shellfish industry doesn't look good and it has
nothing to do with sea otters; it has to do with ocean
acidification and the ability to calcify their shells. This is
not the first issue that has ever come up with sea otters around
the world. In fact there are dozens. For instance, Southern
California had all the same issues we have and they decided to
embrace the sea otters as opposed to harvesting them. They were
able to grow it to a $150 million business. The City of Santa
Barbara alone employs over 388 people in the sea otter viewing
business. Their financial report said for every dollar they lost
in the shellfish industry they made two dollars back in the
viewing industry. Today, viewing is a $50 billion industry in
the U.S. and its growing by 6 percent a year and looking back,
it's totally recession proof, too.
MR. BROWN proposed that they should put a bill together to
either buy out the shell fishermen or help them transition to a
maritime industry with a growth future. A computer analysis of
the industry showed that it would be flat at best in 24 years.
Whereas wildlife viewing in Alaska is a $600 million industry
today and it will be well over $2 billion in 24 years.
3:51:34 PM
Further he said, if SB 60 passes, they would just be back here
in a few years saying there's not enough shellfish and that the
bounty should be raised to $500. Rewriting the bill to be
constructive would give a lot of nice people in the shellfish
industry a job in a growth maritime industry.
SENATOR FRENCH asked him to talk a little bit about his
background on the economic advantages of wildlife viewing versus
harvesting.
MR. BROWN said for most of his career he ran billion dollar
corporations; he was president and CEO of Siemens and Schneider
in Latin American and Canada (largest electrical business in the
world). He retired a few years ago and moved to beautiful
Juneau, Alaska, and runs a business called "Weather Permitting
Alaska," an environmental investment business that invests in
alternative energy and other things. He is actively in a whale
watching business and that is one of the most incredible
businesses he has ever seen. They have 80 percent ROI and the
growth is incredible; they are booked all the time. Wildlife
viewing is one of the best growing businesses in the world.
SENATOR DYSON asked if that $600 million in the viewing industry
was from cruise ships.
MR. BROWN replied that figure included everything: Denali is
about $200 million; Southeast is about $300 million, and about
$100 million in the Kenai.
SENATOR DYSON asked if the implication was that our commercial
fishermen here could all transfer to another job and learn to
take out tourists.
MR. BROWN replied only the shell fishermen, not the commercial
finfish industry.
3:54:29 PM
JERRY MCCUNE, lobbyist, Cordova District Fishermen United,
Cordova, Alaska, said it was good to have this issue on the
table even though a bounty in addition to being illegal isn't
necessarily the way to go. Sea otters had rebounded "big time"
in Prince William Sound after the oil spill. His problem is with
the federal agency that he has been asking for a population
assessment from for years. If the sea otter population gets down
to where it should be, then you get into the Marine Mammal
Protection Act and all kinds of trouble. That happened in the
Aleutians.
MR. MCCUNE said he wasn't blaming all the problems on sea
otters; there were earthquakes, ocean warming and other things.
He hadn't had a dungeness fishery for a long time, but he could
tell them that the little crabs go into the shallow water and
get eaten fast; the shells on the islands are half a foot deep
from sea otters. Sea otters need a lot of food to survive and
once they eat themselves out of an area, they move on, and they
are moving down toward Yakutat now.
He said sea Otters are at an all-time high in Prince William
Sound and he was not advocating killing them off, but he wanted
to push the federal agencies to do a better job of managing them
not just protecting.
He also took exception with the shellfish industry that is still
viable in Southeast because it had already crashed in Yakutat.
The Bering Sea is still thriving, because it's very deep, so sea
otters have a hard time getting down that far. Basically he
thought there is room for both and this conversation is very
useful.
3:58:19 PM
TINA BROWN, representing herself, Juneau, Alaska, opposed SB 60.
She said sea otters are a key-stone species that are necessary
for a healthy near-shoreline ecosystem for some sea mammals,
birds and finfish including salmon and herring. Because of the
near extermination of sea otters during the Russian trade, no
one alive today has seen a healthy Southeast Alaska near-shore
ecosystem (confirmed by all sea otter biologists).
When sea otters are present sea urchins are kept in check and
kelps flourish providing habitat for fishes, marine birds,
mammals; the finfish industry can actually benefit from the
presence of sea otters. They also reduce greenhouse gases, which
benefits everyone.
She explained that sea otters have a narrow limited home range
and unsupervised take like this bounty proposes could cause
unsustainability. Whether the Southeast population is at optimum
sustainable population is not known and may even be a candidate
for the MMPA right now.
MS. BROWN said that ADF&G is doing sea otter studies and had a
sea otter symposium last February 21. Sea otter numbers in the
Aleutians are low and it's irresponsible to encourage take in
those areas. SB 60 disregards the large and growing tourism
industry; sea otter viewing is popular and lucrative. Allen
Marine in Sitka started out with sea otter viewing.
MS. BROWN said this bill is getting negative attention
nationally already; it seems to support circumventing the MMPA
for predator control and Alaska already has a tarnished image.
4:00:55 PM
KATHY HANSON, Executive Director, Southeast Alaska Fishermen's
Alliance (SEAFA), Juneau, Alaska, supported SB 60. This
legislation is a possible way to help manage the ecosystem and
maintain a sustainable shellfish industry and sea otters in
Southeast Alaska, she said. If sea otters continue to grow the
way they normally do, they will expand into other areas quickly
and then starve themselves out. At the point your shellfish
resources in the area have been killed off.
When she started SEAFA 10 years ago, she talked to the Fish and
Wildlife Service who basically said sea otters would grow, die
off, and the population would stabilize. She asked about the
shellfish resources and was told they would need to be listed on
the Endangered Species Act. That is what commercial fishermen
are concerned about; they don't want to totally do away with
every single sea otter, but they want to find a nice level where
everyone who likes to eat shellfish can do that as well as view
sea otters.
SENATOR BISHOP suggested going through Russian/American Company
shipping logs for information on sea otter pelts to establish a
baseline.
MS. HANSON said she knew of one Fish and Wildlife biologist who
was looking for funding to do that.
4:04:09 PM
MAX WORHATCH, representing himself, Petersburg, Alaska,
supported SB 60. He said he has been a dungeness fisherman for
over 20 years and had seen firsthand what otter predation can do
to productive crab grounds. The economic loss is very apparent
already and this is a positive way the state can address the
impact of otter predation on valuable state resources.
CHAIR GIESSEL found no further testifiers and closed public
testimony.
4:05:20 PM
SENATOR STEDMAN said he represented District Q, which is mainly
coastal Southeast, and he recognized there are some legal issues
to work on and hoped they could be addressed in the Judiciary
Committee. He also recognized that this issue is in the early
stages of discussion and he looked forward to any
recommendations that the committee wants to put forward. It's
timely that the State of Alaska stands up for the people in the
state; it's getting to the point where a lot of residents in the
outlying communities are suffering. There is interest from the
Sealaska Heritage Foundation in creating sea otter products, but
they are having problems doing that as evidenced by the
"significantly altered" hat that didn't qualify - and you can't
even put a zipper in a vest!
4:06:52 PM
SENATOR MICCICHE thanked the sponsor for opening this discussion
that is social, nutritional and cultural as well as economic.
Speaking for South Central Alaska, he said that mollusks and
crustaceans have literally disappeared where they were counted
on by families 30 years ago. He appreciated Senator Stedman
bringing it up as a great way to get some attention and start a
discussion about a plan forward for Alaskans. He had a problem
with how quickly people are ready to write off generations of
commercial fisheries where people have been involved for
generations.
SENATOR DYSON said he wanted to be identified with those
previous remarks. Maybe they should think about ranking
different industries and ways of making a living. For him
providing good food and using the animal for an industry
outranks providing good entertainment. He also agreed that the
legality of SB 60 should be discussed in the Judiciary
Committee.
SENATOR STEDMAN said he took that advice seriously; "bounty"
connotes wild and crazy people shooting up things and that is
not what they want to talk about.
4:09:55 PM
SENATOR FRENCH said he appreciated Senator Stedman's remarks,
but he still thought there was a way to work within the
committee to help with things like the fuel costs so more sea
otters could be harvested legally.
4:10:31 PM
SENATOR DYSON moved to report SB 60 from committee to the next
committee of referral with attached fiscal note and individual
recommendations.
CHAIR GIESSEL announced that, without objection, SB 60 passed
from the Senate Resources Standing Committee.
SB 69-CHINOOK RESEARCH & RESTORATION ENDOWMENT
4:11:17 PM
CHAIR GIESSEL announced SB 69 to be up for consideration and
noted that public testimony was closed.
4:11:37 PM
SENATOR MICCICHE moved Amendment 1.
28-LS0596\A.1
Bailey
AMENDMENT 1
OFFERED IN THE SENATE BY SENATOR MICCICHE
Page 5, line 26, following "Board":
Insert "and the National Fish Habitat Board"
SENATOR FRENCH objected for explanation purposes.
SENATOR MICCICHE explained that it inserts "and the National
Fish Habitat Board" on page 5, line 26, following "Board". He
had had some involvement with that board and the reality is that
the state could take advantage of some additional federal
funding to supplement its investment.
4:12:50 PM
SENATOR FRENCH said he thought that language on page 5, line 26,
just urges the National Pacific Research Board to consider the
process and structure of the National Fish Habitat Board at the
same time it considers adopting its own regulations.
SENATOR MICCICHE agreed and explained that a project's ranking
in the Fish Habitat Board process is important and if two are
evaluated together they would both likely be eligible for the
other funding as well.
SENATOR FRENCH asked if the bill sponsor supported the
amendment.
SENATOR MICCICHE answered that the sponsor supported it as well
as the department.
SENATOR FRENCH withdrew his objection.
CHAIR GIESSEL, finding no further objection, stated that
Amendment 1 was adopted.
4:14:13 PM
DAVID SCOTT, staff to Senator Olson, said the sponsor of the
bill is aware that the sponsor of the amendment is a commercial
fisherman and he trusts his judgment on that. He summarized that
there is a very real sense across many parts of the state about
what's wrong with our King Salmon and this measure is trying to
help people get a grip on what is going on with their resource.
4:15:17 PM
SENATOR DYSON moved to report SB 69, as amended, from committee
with attached fiscal note(s) and individual recommendations.
SENATOR MICCICHE objected to say there may be a discussion
taking place in the Finance Committee about the funding
mechanism. He removed his objection.
CHAIR GIESSEL found no further objection and announced that CSSB
60(RES) moved from the Senate Resources Standing Committee.
SB 59-OIL & GAS EXPLORATION/DEVELOPMENT AREAS
4:16:42 PM
CHAIR GIESSEL announced SB 59 to be up for consideration.
DAN SULLIVAN, Commissioner, Department of Natural Resources
(DNR), Juneau, Alaska, provided an overview of SB 59. In the
broader context he said arresting the TAPS throughput decline is
the most urgent issue facing the state economically.
4:17:54 PM
Enhancing Alaska's competitiveness across a whole number of
areas, in particular tax reform, also includes promoting
Alaska's resources and resource base throughout the entire
world, and facilitating and incentivizing the next phase of
North Slope development. Another key element of that
comprehensive strategy is ensuring a permitting process that is
more efficient, timely, and more certain, and that is what SB 59
is focused on.
4:19:10 PM
COMMISSIONER SULLIVAN said in talking to different companies
throughout the country and the world the issue of
competitiveness comes up, but the issues of permitting,
timeliness and certainty of Alaska's permitting system also come
up. Repsol recently had very senior officials come in from
Madrid to talk about a number of things and they saw the work
the legislature has taken up regarding taxes and permitting
reform, particularly as they looked at moving into development.
He said that one of the other things he has testified previously
on was the Governor's Comprehensive Permitting Reform
Modernization Plan and that includes an entire suite of
permitting reform efforts that has very strong bipartisan
support. Whether it's TAPS throughput, gasline commercialization
off the North Slope, Interior energy plan, Cook Inlet energy
issues, strategic and critical minerals, the work they are
trying to do on permitting reform and modernization touches all
of those critical interests of the state.
COMMISSIONER SULLIVAN said it is encouraging when you start to
see things move. Last week he put out a press release because
the Frasier Institute that does an annual survey of mining
competitiveness had moved Alaska up in its ranking
significantly, and for two major reasons: the statewide mineral
assessment and the significant improvements in labor and skilled
force training in the mining sector (which Senator Bishop had a
lot to do with).
4:22:31 PM
He said the state certainly wants to maintain its high standards
of environmental protection and encouraging responsible
development, but none of the governor's bill diminishes from
that. He explained that there has also been the issue of public
input and this goes to leases that have already been determined
through best interest findings that there is going to be oil and
gas development; the leases have already been issued. The best
interest findings have an enormous public input process. This is
trying to get public input at the beginning of exploration
phases and at the beginning of development phases; it is in many
ways more meaningful than at the smaller points throughout each
of the phases. This also brings certainty to exploration and
development which is not only good for the public to know what's
happening, but it does encourage more investment and it's good
with regard to industry's outlook on developing responsible
resource development in the state.
4:24:11 PM
COMMISSIONER SULLIVAN said that Representative Hawker brought up
a good point on the companion bill in House Resources that DNR
arguably already has the authority to do this. But that
authority is not clear and he wants it absolutely clear that the
department has the authority from the legislative branch rather
than going to court.
4:26:07 PM
SENATOR BISHOP asked how much the gap in permitting time would
close from enacting this legislation.
COMMISSIONER SULLIVAN answered that it closes up public notice
times that are 30, 60 and 90 days currently. He explained that a
lot of their permitting reform efforts are focused on making a
very comprehensive public input process up front at the
exploration phase and the development phase with very specific
parameters within those plans that are approved by public notice
and comment rather than changing something in the middle of the
plan - so everyone knows where the certainty is. But they think
it might have a much more positive impact than just the specific
window of days that are being removed.
4:28:23 PM
BILL BARRON, Director, Division of Oil and Gas, Department of
Natural Resources (DNR), said over the last several years they
had tried to take a real hard look at land management issues and
processes they can modify to encourage dialogue, transmission of
information and data between the public sector and the private
sector. In this bill they are trying to figure out another tool
to manage state land.
One of the common themes they have heard in several discussions
with the North Slope Borough, specifically, is that they really
want to understand on a broader basis what will happen in a
geographic area rather than a project by project approach.
MR. BARRON said they took a page out of their play book from
area wide lease sales in which they go through a robust
discussion and identify state lands that would be made available
for state leases for oil and gas development. The understanding
is that this land well be developed and it's really a question
then of how to develop it.
The next logical step is to identify smaller areas for
exploration and even smaller areas for development than the area
wide lease is. The public would engage upfront with a broader
understanding of the activities that could take place and
probably will take place and be able to identify areas of
concern (before plans are approved) and let the identify
mitigation issues and set standards for companies. He said this
is not something they would do across all state lands; it's just
a tool they would have available.
4:32:54 PM
WENDY WOOLF, Office Assistant, Division of Oil and Gas,
Department of Natural Resources (DNR), said she would go through
how exploration and development activities are approved today
and how this bill will change the process.
She started with how they offer lands for sale and explained
that the department has five oil and gas lease sales in the
state: the North Slope, the Beaufort Sea, the North Slope
Foothills, Cook Inlet and the Alaska Peninsula. These are the
area wide lease sales the bill is addressing.
She said that SB 59 takes the statutory requirement to provide a
public notice at the beginning of each phase of a multi-phased
project and clarifies that DNR can review the phase in each
geographic area. In this context, "project" is not the
individual activity on the land; it is oil and gas development
in general, because the "project" is the lease sale area.
She said the best interest findings indicate the department is
going to do a multi-phased project review, the first phase being
a lease disposal phase, the second phase being exploration and
the third phase being development. When the word "project" is
used in this context it means a general project not one that is
site specific. The last one is actually transportation, which is
the pipelines.
MS. WOOLF said their best interest finding is when they decide
that oil and gas development will occur in the area and it is
done at the initial leasing phase. The question then becomes how
oil and gas development will occur and that's done through the
exploration and development phase decisions. This bill allows
them to take a look at a broader geographical area when
evaluating exploration and development, but it will not change
how they evaluate the transportation phase.
4:35:06 PM
MS. WOOLF explained that this measure will allow the public to
look at exploration and development across the broader
geographic area and provide input about how a particular area
should be developed before the development occurs. They can
identify their concerns at the very beginning before they need
to respond to a project that is already happening in their
neighborhood.
She said industry benefits by knowing what parameters they need
to operate under while they are in the design phase of their
site-specific activities and coming forward with their plan of
operation. So they submit a plan of operation that is in
compliance with not only the lease mitigation measures that come
out in the best interest finding, but in compliance with an
exploration decision that says these are the parameters under
which you can explore.
In the event that a project doesn't meet the parameters, the
department would go out for another public notice and comment.
4:37:19 PM
MS. WOOLF explained that the best interest finding is a broad
public process: it has extensive public and state/federal agency
participation and the impacts associated with oil and gas
development are evaluated based on statutory criteria. The
resulting decision has concrete mitigation measures that the
operators who are successful in acquiring leases in the area
must comply with. It also says they are doing a multi-phased
project review, so that it is only addressing the leasing phase.
Before subsequent phases are approved, the division would do a
public notice of opportunity to comment. Those phases are
defined in statute as "exploration, development, and
transportation."
4:38:30 PM
To implement that requirement, the public is accustomed to the
department taking the requirement to provide public notice and
opportunity to comment at the beginning of an exploration or
development phase down to a site specific activity on a lease by
lease basis from a particular operator. And what happens is that
the lease is disposed of in the lease sale and then the lessee
will come in probably a few years later with a plan of operation
for their seismic program (that may go across multiple leases).
The department would go out to public notice for comments and
come up with approval for their seismic program that includes
any special stipulations that might be necessary.
If they are successful with that, the operator will come in with
their next plan of operation for an exploration well; again the
department will go out with a public notice of comment and issue
the approval for the plan of operation for exploration. If the
same operator wants to come in with another exploration plan -
even for the same lease - the department will go out again for
another public notice and comment before approving it. If the
operator is successful and has a discovery, they will come in
and describe their conceptual development plans, but then at the
point that they come in with their actual plan of development
for their initial development the department will go out with
the public review.
After that public comment period and the plan is approved, if
the operator needs to modify it, they will go out with another
public notice, even though it is in the same area being
developed and do another public notice with comment before
approving the modified plan.
Pipeline applications will continue being a separate process and
is dealt with in a separate statute; that won't change.
If the operator is successful and wants to have enhanced
recovery or additional development (a satellite pad), even in a
fully developed lease, the department will go out with another
public comment period.
4:41:17 PM
If the adjoining lease's operator comes in and wants to put an
exploration well in, the process is started over again, even
though the lease to the north is in full development. Then when
they come in with a development plan, again, the department will
go out for a public notice and comment before approving the plan
of operation. Transportation will continue to be noticed
separately. As Ms. Woolf said, that is how the process works
today and it's very redundant if you're in a small geographic
area. If you're in a totally separate area it's not.
MS. WOOLF explained that when you're talking about a geographic
area where there's activity going on, it's nice to be able to
look at something much more holistically than to focus on each
individual project. In the past the public has wanted to know
more about what is happening in an area before they even provide
comments for the first plan.
4:46:46 PM
Under SB 59, operators' plans would still have agency review (as
today). The development phase goes through a public notice
period and the activities are described; a phase analysis is
done when the department has a conceptual plan of development
from an operator. When the plans are implemented, subsequent
public notices will occur. The pipeline applications will
continue to have their separate public notices.
MS. WOOLF said it's important to remember that the plans of
operation are not automatically approved by these phasing
decisions. The department is required to review them to make
sure they are in compliance with the regulations, the mitigation
measures and sister agency comments. Part of what these
decisions will allow the operators to do is to plan ahead and
hopefully by the time the department gets the plans of operation
its concerns will have been addressed.
So, at the end of the day, the department would come out with
their exploration phase decision and have a public notice and
comment on a little geographic area. They'd go through the
process and come up with the special stipulations, and then when
an operator comes in with their particular plans of operation
for their exploration phase, those pieces could go through
without public notice. The plans will still require approvals,
but they won't require the public notice.
She explained that the department goes out with a decision for
the development phase outlining all the criteria and the
parameters, but once they have gotten through that process, each
individual plan of operation that is implementing the
development plan can proceed without the additional public
notices. As always, any time there are changes or concerns in
the plans of operation that weren't considered in the first
phase analysis they can always go out with individual public
notices for them. This is just a tool the department can use;
it's not a requirement, so it doesn't prevent them from going
out individually.
4:49:29 PM
MS. WOOLF said the time savings will be for both the state and
the companies, because now they may go out for an agency review
and then the public notice and comments; and then they tell the
company their concerns and how to address them. For the state
that takes 30-60 days, but it might take 6 months for the
companies, because they have had to modify their plans to
incorporate those concerns. She said they are trying to provide
certainty for everybody going into a development. In the
beginning industry can also say it can't comply and come up with
some other plan, and then the department would see if it could
go forward or not. This is really about how development occurs
on state land; it doesn't change any of the other regulatory
processes that exist and it doesn't change the opportunity to
appeal a decision the department has made in error. Those
decisions are being more accessible, but they are public and
anyone can come in and look at them.
4:51:11 PM
SENATOR FRENCH asked her to compare slides 6 and 9. On slide 6
it looks like there are seven opportunities for public notice
and comment in the normal course of a lease and exploration and
development plan that, but slide 9 looks like there would be
only two opportunities under this bill.
MS. WOLF replied yes, but he was omitting the important initial
opportunity at the best interest decision. It's important to
remember the extensive notices those go through and the lengthy
mitigation measures that are put in place. In order for an
operator to even submit his plan, he has to go through each
mitigation measure in that area and tell her how they are
complying with it.
SENATOR FRENCH said in slide 6 that would be something that
happened before the final finding of the director.
4:52:48 PM
MS. WOOLF said that was correct. She added that every year they
go out to ask for any new information in the sale areas that
could be needed for their best interest findings. At that point
the public could say there is way too much exploration going on
and why.
SENATOR FRENCH asked how much area they are covering with the
second phase after the best interest finding.
MR. BARRONS said he couldn't answer that question yet, because
they are trying to basically put out a systematic approach
towards this process. They intend to fully to establish those
areas through a regulation process. So, they would engage the
public upfront. For instance, someone could come in through that
process and ask for a larger area to be broken into smaller
portions and the department could do that. He explained that the
area wide lease sale is "pretty darn big" and the exploration
areas should not be as big (although it should be fairly big
because the impacts are ice roads and ice pads and very limited
exposure kinds of operations). They really want to concentrate
on the development portion and those areas could be incredibly
small like the size of a single unit.
SENATOR FRENCH commented that this will have some strong and
fantastic applications on the North Slope where there are few
people and few other impacts, where 95 percent of the state
would say yes, let's explore this. But he thought there would be
more conflicts in the Cook Inlet where there are more people and
more recreational and hunting/fishing users. His concern was
giving the department a huge new opportunity to develop without
that same amount of public input in densely populated areas.
MR. BARRONS said he appreciated that insight and that they had
considered that. Even now some people come in with an amendment
to their plan that is too great and the department has required
them to go back out for public notice and comment and that would
still be the practice of the division. He explained that they
might choose not to do it in multi-use areas; Kenai's east side
would be a good example. But this would be a great tool to use
on the west side, which has a less dense population. They are
just trying to get the clear authority to use it.
4:58:09 PM
SENATOR MICCICHE cautioned him to not use the word "Kenai" too
broadly and that "middle of the Inlet" would be a perfect
application. The process in SB 60 was a safer way to understand
the larger environmental community impacts and he liked that. He
also liked that it is separated in phases and the public would
be lot more comfortable knowing it does require a new evaluation
for significant scope or impact changes. Best, he liked the
added efficiency, because if you're doing the same thing, it's
not only more efficient for human resources at the department
but also for NGOs and individuals who are looking at a larger
area.
4:59:02 PM
CHAIR GIESSEL asked Mr. Barron if he had been operating under
this method and felt that he had this authority already, but
wanted it clarified in statute.
MR. BARRON replied no; they had been doing exactly as Ms. Woolf
described: the public process at every step. But they want to
make sure they understand clearly what this body wants them to
operate.
5:00:23 PM
JAMES SULLIVAN, lobbyist, Southeast Alaska Conservation Council
(SEACC), Juneau, Alaska, said he was becoming more uncertain
about how SB 59 would affect large portions of the state the
more he heard the department's presentations. It's particularly
problematic to not be able to comment on changes within a small
geographic area (as the public is currently allowed) and how
this would be applied in the Cook Inlet area in particular.
CHAIR GIESSEL thanked everyone for their testimony. She closed
public testimony and held SB 59 in committee.
5:03:45 PM
Finding no further business to come before the committee, Chair
Giessel adjourned the Senate Resources Committee meeting at 5:03
p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| SB 59 vs A.pdf |
SRES 3/15/2013 3:30:00 PM |
SB 59 |
| SB 59 Transmittal Letter.pdf |
SRES 3/15/2013 3:30:00 PM |
SB 59 |
| SB 59 Briefing Paper.pdf |
SRES 3/15/2013 3:30:00 PM |
SB 59 |
| SB 59 Sectional Analysis.pdf |
SRES 3/15/2013 3:30:00 PM |
SB 59 |
| SB 59 Fiscal Note DNR-DOG 2013.01.14.pdf |
SRES 3/15/2013 3:30:00 PM |
SB 59 |
| SB59 SRES DNR Presentation 2013.03.15.pdf |
SRES 3/15/2013 3:30:00 PM |
SB 59 |
| SB 69 Supp Letter.pdf |
SRES 3/15/2013 3:30:00 PM |
SB 69 |
| SB 59 Supp Letter Linc CorriFeige 2013.03.04.pdf |
SRES 3/15/2013 3:30:00 PM |
SB 59 |
| SB 59 Supp Letter NSB CharlotteBrower 2013.03.15.pdf |
SRES 3/15/2013 3:30:00 PM |
SB 59 |
| SB 59 Supp Letter BRPC BartArmfield 2013.03.01.PDF |
SRES 3/15/2013 3:30:00 PM |
SB 59 |
| SB 69 Supp Written Testimony KatieWilliams BSFA.pdf |
SRES 3/15/2013 3:30:00 PM |
SB 69 |
| SB 69 NFHAP Funding Allocation - approved by the NFHB - Oct 2011.pdf |
SRES 3/15/2013 3:30:00 PM |
SB 69 |
| SB 60 Opp Letter TinaBrown 2013.03.13.pdf |
SJUD 4/5/2013 1:30:00 PM SRES 3/15/2013 3:30:00 PM |
SB 60 |
| SB 60 Supp Written Testimony SARDFA 2013.03.13.pdf |
SJUD 4/5/2013 1:30:00 PM SRES 3/15/2013 3:30:00 PM |
SB 60 |
| SB 60 Supp Letter JulieDecker 2013.03.13.pdf |
SJUD 4/5/2013 1:30:00 PM SRES 3/15/2013 3:30:00 PM |
SB 60 |
| SB 60 USFWS 1994 Conservation Plan.pdf |
SJUD 4/5/2013 1:30:00 PM SRES 3/15/2013 3:30:00 PM |
SB 60 |
| SB 60 Legal Opinion.pdf |
SJUD 4/5/2013 1:30:00 PM SRES 3/15/2013 3:30:00 PM |
SB 60 |
| SB 60 Supp Letter SE Conference.pdf |
SJUD 4/5/2013 1:30:00 PM SRES 3/15/2013 3:30:00 PM |
SB 60 |
| SB 60 UCSC Study distributed by AWA.pdf |
SJUD 4/5/2013 1:30:00 PM SRES 3/15/2013 3:30:00 PM |
SB 60 |
| SB 60 National Marine Sanctuaries Kelp Forests distributed by AWA.pdf |
SJUD 4/5/2013 1:30:00 PM SRES 3/15/2013 3:30:00 PM |
SB 60 |
| SB 60 Supp Letter UFA 2013.03.15.pdf |
SJUD 4/5/2013 1:30:00 PM SRES 3/15/2013 3:30:00 PM |
SB 60 |
| SB 60 Written Testimony SEAFA 2013.03.12.pdf |
SJUD 4/5/2013 1:30:00 PM SRES 3/15/2013 3:30:00 PM |
SB 60 |
| SB 60 Opp Letter PatriciaOBrien 2013.03.15.pdf |
SJUD 4/5/2013 1:30:00 PM SRES 3/15/2013 3:30:00 PM |
SB 60 |
| HJR 5 Supp Letter 19 SEAGO.pdf |
SRES 3/15/2013 3:30:00 PM |
HJR 5 |
| HJR 5 Presentation Rep. Tarr.pdf |
SRES 3/15/2013 3:30:00 PM |
HJR 5 |