SB 164: "An Act prohibiting leases under the Right-of-Way Leasing Act on state land in or adjacent to the Beaufort Sea; and providing for an effective date."

00 SENATE BILL NO. 164 01 "An Act prohibiting leases under the Right-of-Way Leasing Act on state land in or 02 adjacent to the Beaufort Sea; and providing for an effective date." 03 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 04 * Section 1. AS 38.35 is amended by adding a new section to read: 05 Sec. 38.35.017. Limitation on leases in or adjacent to the Beaufort Sea. (a) 06 Consistent with and in furtherance of the statements of general state policy guiding 07 resource development set out in art. VIII, sec. 1, Constitution of the State of Alaska, 08 that the resources of the state be developed "by making them available for maximum 09 use consistent with the public interest" and in art. VIII, sec. 2, Constitution of the State 10 of Alaska, directing that provision shall be made by the legislature for "the utilization, 11 development, and conservation of all natural resources belonging to the State . . . for 12 the maximum benefit of its people," and consistent with and in furtherance of the 13 general legislative declaration of policy for this chapter set out in AS 38.35.010, it is 14 the policy of this state that the overall strategy for development, use, and control of a

01 pipeline or pipelines to develop the state's substantial North Slope natural gas 02 resources be directed 03 (1) to enhance the standard of living of state residents by 04 (A) ensuring that, in conjunction with out-of-state market 05 driven commercial demand for North Slope natural gas, state residents and 06 businesses will have access, directly or indirectly, to that portion of the gas that 07 will meet the reasonably foreseeable in-state demands for it, including 08 substitution of the North Slope natural gas for depleting gas reserves in 09 Southcentral Alaska in order to maintain a vital domestic and industrial energy 10 source, and ensuring that the pipeline or pipelines for the transportation of 11 North Slope natural gas will be designed and located to be responsive to these 12 requirements; 13 (B) making the maximum contribution to the development of 14 job opportunities in this state by providing direct short-term construction and 15 long-term operation- and maintenance-related employment on the pipeline or 16 pipelines and by providing necessary support services; and 17 (C) adding significant long-term property value to the tax base 18 of the state and local governments, thereby providing the means to support 19 public education, public health, transportation, and other essential state and 20 local government projects and services; 21 (2) to ensure that the design, location, and construction of a pipeline or 22 pipelines for delivery of North Slope natural gas to North American markets through 23 connection to the North American natural gas pipeline network enhance opportunities 24 for implementing gas deliveries using alternative technologies and the construction of 25 other pipelines to deliver North Slope natural gas to foreign and domestic markets; and 26 (3) to ensure construction of the pipeline or pipelines consistent with 27 careful protection of the state's natural environment, with minimum environmental 28 degradation, to the greatest extent possible, and with protection of fish, wildlife, and 29 biotic resources for the use of persons who depend upon them by using available 30 transportation infrastructure to initiate and complete project construction and 31 maintenance and by avoiding duplication of facilities.

01 (b) Consistent with the legislative policy and goals set out in (a) of this 02 section, the commissioner may not grant a lease across state land that is in or adjacent 03 to the Beaufort Sea for pipeline right-of-way purposes to authorize construction and 04 operation of a natural gas pipeline following a "northern" or "over-the-top" route 05 running east from the North Slope to Canada's Mackenzie River Valley, then south to 06 link to existing pipeline networks to transport North Slope natural gas to North 07 American markets. 08 (c) The limitation on leasing set out in (b) of this section does not apply on 09 and after the date on which a natural gas pipeline following a "southern" route that 10 parallels the Trans Alaska Pipeline System and the Alaska Highway to transport North 11 Slope natural gas to North American markets or Alaska tidewater for delivery to 12 foreign and domestic markets has been completed and has begun operation. 13 * Sec. 2. This Act takes effect immediately under AS 01.10.070(c).