HCS SB 164(O&G): "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 HOUSE CS FOR SENATE BILL NO. 164(O&G) 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 15 (i) providing direct short-term construction and long- 16 term operation- and maintenance-related employment on the pipeline or 17 pipelines, to the end that the resources be developed with qualified 18 contractors and firms in this state for work to be performed, including 19 the fabrication and installation of required facilities, and that state 20 residents be employed, consistent with law; for purposes of this sub- 21 subparagraph, a person is considered a resident if the person is 22 physically present in the state with the intent to remain in the state 23 indefinitely and has a home in the state, and a contractor or firm is 24 considered as qualified if the contractor or firm qualifies as an Alaska 25 bidder under AS 36.30.170(b); and 26 (ii) providing necessary support services; and 27 (C) adding significant long-term property value to the tax base 28 of the state and local governments, thereby providing the means to support 29 public education, public health, transportation, and other essential state and 30 local government projects and services; 31 (2) to ensure that the design, location, and construction of a pipeline or

01 pipelines for delivery of North Slope natural gas to North American markets through 02 connection to the North American natural gas pipeline network enhance opportunities 03 for implementing gas deliveries using alternative technologies and the construction of 04 other pipelines to deliver North Slope natural gas to foreign and domestic markets; and 05 (3) to ensure construction of the pipeline or pipelines consistent with 06 careful protection of the state's natural environment, with minimum environmental 07 degradation, to the greatest extent possible, and with protection of fish, wildlife, and 08 biotic resources for the use of persons who depend upon them by using available 09 transportation infrastructure to initiate and complete project construction and 10 maintenance and by avoiding duplication of facilities. 11 (b) Consistent with the legislative policy and goals set out in (a) of this 12 section, the commissioner may not grant a lease across state land that is in or adjacent 13 to the Beaufort Sea for pipeline right-of-way purposes to authorize construction and 14 operation of a natural gas pipeline following a "northern" or "over-the-top" route 15 running east from the North Slope to Canada's Mackenzie River Valley, then south to 16 link to existing pipeline networks to transport North Slope natural gas to North 17 American markets. 18 (c) The limitation on leasing set out in (b) of this section does not apply on 19 and after the date on which a natural gas pipeline following a "southern" route that 20 parallels the Trans Alaska Pipeline System and the Alaska Highway to transport North 21 Slope natural gas to North American markets or Alaska tidewater for delivery to 22 foreign and domestic markets has been completed and has begun operation. 23 * Sec. 2. This Act takes effect immediately under AS 01.10.070(c).