CSHB 395(RES): "An Act relating to the recovery of shallow natural gas, to the regulation of shallow natural gas or coal bed methane operations, and to oil and gas leasing operations involving activities not governed under the Alaska Land Act; contingently redesignating shallow natural gas as nonconventional gas, and relating to the regulation of that gas under that contingency; and providing for an effective date."
00 CS FOR HOUSE BILL NO. 395(RES) 01 "An Act relating to the recovery of shallow natural gas, to the regulation of shallow 02 natural gas or coal bed methane operations, and to oil and gas leasing operations 03 involving activities not governed under the Alaska Land Act; contingently redesignating 04 shallow natural gas as nonconventional gas, and relating to the regulation of that gas 05 under that contingency; and providing for an effective date." 06 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 07 * Section 1. AS 31.05.030(j) is amended to read: 08 (j) For exploration and development operations involving shallow natural 09 gas, the commission 10 (1) may not 11 (A) issue a permit to drill under this chapter if the well 12 would be used to produce gas from an aquifer that serves as a source of 13 water for human consumption or agricultural purposes unless the
01 commission finds that the well will not adversely affect the aquifer as a 02 source of water for human consumption or agricultural purposes; or 03 (B) allow injection of produced water except at depths 04 below known sources of water for human consumption or agricultural 05 purposes; 06 (2) shall 07 (A) regulate hydraulic fracturing in shallow natural gas 08 wells to assure protection of drinking water quality; 09 (B) regulate the disposal of wastes produced from the 10 operations unless the disposal is otherwise subject to regulation by the 11 Department of Environmental Conservation or the Environmental 12 Protection Agency; and 13 (C) for the purposes of AS 46.04.030(b), [THE 14 COMMISSION SHALL] determine whether a well drilled for shallow natural 15 gas may penetrate a formation capable of flowing oil and, if so, whether the 16 volume of oil encountered will be of such quantities that an oil discharge 17 prevention and contingency plan will be required. 18 * Sec. 2. AS 31.05.030(j) is repealed and reenacted to read: 19 (j) For exploration and development operations involving nonconventional 20 gas, the commission 21 (1) may not 22 (A) issue a permit to drill under this chapter if the well would 23 be used to produce gas from an aquifer that serves as a source of water for 24 human consumption or agricultural purposes unless the commission finds that 25 the well will not adversely affect the aquifer as a source of water for human 26 consumption or agricultural purposes; or 27 (B) allow injection of produced water except at depths below 28 known sources of water for human consumption or agricultural purposes; 29 (2) shall 30 (A) regulate hydraulic fracturing in nonconventional gas wells 31 to assure protection of drinking water quality;
01 (B) regulate the disposal of wastes produced from the 02 operations unless the disposal is otherwise subject to regulation by the 03 Department of Environmental Conservation or the Environmental Protection 04 Agency; and 05 (C) for the purposes of AS 46.04.030(b), determine whether a 06 well drilled for nonconventional gas may penetrate a formation capable of 07 flowing oil and, if so, whether the volume of oil encountered will be of such 08 quantities that an oil discharge prevention and contingency plan will be 09 required. 10 * Sec. 3. AS 31.05 is amended by adding a new section to read: 11 Sec. 31.05.098. Public forum process concerning shallow natural gas. (a) 12 For the purpose of resolving public health, safety, welfare, or environmental 13 complaints about potential or actual shallow natural gas exploration and development 14 operations, the commission shall, by regulation, develop and implement a public 15 forum process by which to achieve informal resolution of the complaints within 60 16 days of the filing of the complaints. The commission may provide that, if resolution 17 of the complaints is not achieved through the informal process established by 18 regulation, a party may petition the commission to take action on the complaint under 19 AS 31.05.060 - 31.05.085 as to a matter that falls within the commission's powers and 20 duties under AS 31.05.030. For any other matter, the commission shall refer the 21 complaint to other federal, state, or local agencies, as appropriate. 22 (b) The commission's regulations adopted under this section shall provide for 23 scheduling a public forum at a location reasonably proximate to the land that is the 24 subject of or that is affected by the complaint and reasonable public notice and 25 opportunity to be heard. If the public forum is not personally convened and conducted 26 by a majority of the members of the commission, the person conducting the forum 27 shall prepare and submit to the commission a report of the forum proceedings. The 28 report prepared under this subsection is a public record. The commission may modify 29 a rule or condition in a plan of development or operation for a field or pool to address 30 an issue identified by the commission or the report. 31 * Sec. 4. AS 31.05.098(a) is repealed and reenacted to read:
01 (a) For the purpose of resolving public health, safety, welfare, or 02 environmental complaints about potential or actual nonconventional gas exploration 03 and development operations, the commission shall, by regulation, develop and 04 implement a public forum process by which to achieve informal resolution of the 05 complaints within 60 days of the filing of the complaints. The commission may 06 provide that, if resolution of the complaints is not achieved through the informal 07 process established by regulation, a party may petition the commission to take action 08 on the complaint under AS 31.05.060 - 31.05.085 as to a matter that falls within the 09 commission's powers and duties under AS 31.05.030. For any other matter, the 10 commission shall refer the complaint to other federal, state, or local agencies, as 11 appropriate. 12 * Sec. 5. AS 31.05.170(14) is amended to read: 13 (14) "shallow natural gas" means coal bed methane, natural gas drilled 14 for under a lease authorized by AS 38.05.177, or natural gas drilled for in a well the 15 true vertical depth of which is 3,000 [4,000] feet or less; 16 * Sec. 6. AS 31.05.170 is amended by adding a new paragraph to read: 17 (16) "nonconventional gas" has the meaning given in AS 38.05.965. 18 * Sec. 7. AS 34 is amended by adding a new chapter to read: 19 Chapter 90. Mineral Interests. 20 Sec. 34.90.010. Notice of operations. (a) Except for activities governed by 21 AS 38.05, the developer shall give the surface owner written notice of the oil and gas 22 operations contemplated at least 20 days before commencement of operations. The 23 requirement of written notice may be waived by the parties. 24 (b) Unless notice has been waived by the parties, the developer shall give 25 notice to the record surface owner at the owner's address as shown by the records of 26 the state recorder at the time notice is given. The notice must sufficiently disclose the 27 plan of work and operations to enable the surface owner to evaluate the effect of oil 28 and gas operations on the surface owner's use of the property. 29 (c) If a developer fails to give notice as provided in this section, the surface 30 owner may seek any appropriate relief in the court of proper jurisdiction and may 31 receive actual damages.
01 Sec. 34.90.020. Damages and posting of bond. A developer may not 02 exercise a right of entry until the developer makes provision to pay the surface owner 03 full payment for all damages sustained by the surface owner by reason of entering 04 upon the land. If the surface owner, for any cause, refuses or neglects to settle the 05 damages, the developer may enter upon the land after posting a surety bond 06 determined by the Department of Natural Resources using a procedure similar to the 07 procedure used to administer AS 38.05.130, including notice and an opportunity to be 08 heard. The bond must be sufficient as to form, amount, and security to secure to the 09 surface owner payment for damages. The surface owner may institute legal 10 proceedings in a court where the land is located as may be necessary to determine the 11 damages that the surface owner may suffer. 12 Sec. 34.90.095. Definitions. In this chapter, 13 (1) "developer" means the person who acquires the mineral estate or 14 lease for the purpose of extracting or using the minerals; 15 (2) "mineral estate" means an estate in or ownership of all or part of 16 the minerals underlying a specific tract of land; 17 (3) "minerals" includes oil and gas; 18 (4) "oil and gas operations" means an activity for which a permit is 19 required by AS 31.05.090 that requires entry upon the surface estate; 20 (5) "surface estate" means an estate in or ownership of the surface of a 21 particular tract of land; 22 (6) "surface owner" means any person who holds record title to the 23 surface of the land as an owner. 24 * Sec. 8. AS 38.05.177(c) is amended to read: 25 (c) The director shall give notice under AS 38.05.945 of receipt of the lease 26 application, [AND] call for comments from the public, and execute a lease as 27 follows: 28 (1) the [. THE] director's call for public comments must provide 29 opportunity for public comment for a period of not less than 60 days; 30 (2) if [. IF], after review of information received during the public 31 comment period and consideration of public comments received, the director
01 determines that the discovery of a local source of natural gas would benefit the 02 residents of an area, the director may [SHALL] execute a lease for the area described 03 in (b) of this section; the [. THE] director may [SHALL] execute the lease only after 04 completion of a title search, the close of the public comment period, and, if review is 05 required under AS 46.40, after the final consistency determination is made under 06 AS 46.40; 07 (3) a [. A] lease entered into under this subsection gives the lessee the 08 exclusive right to explore for, develop, and produce, for a term of three years, natural 09 gas on the state land described in the lease; the right to explore for, develop, and 10 produce is limited to gas from a field if a part of the field is within 3,000 feet of the 11 surface. 12 * Sec. 9. AS 38.05.177(f) is amended to read: 13 (f) A shallow gas lease must provide for 14 (1) payment to the state of annual rent in the amount of $1 an [PER] 15 acre; the [. THE] rent is due and payable on the date determined in the lease; if [. IF] 16 the lease payment is not received by the due date, the director shall mail the lessee one 17 written notice, certified return receipt requested; if [. IF] the lessee fails to pay the 18 rent within 30 days after [OF] receipt of the notice, the director shall terminate the 19 lease; 20 (2) a water well testing requirement for each lease that contains 21 one or more wells that serve as a source of potable water; the testing requirement 22 of this paragraph applies to each water well that is located within a square that 23 bounds a circle with a radius of one-quarter mile around the drill site and the 24 sides of which are parallel or perpendicular to the four cardinal directions and 25 are tangent to the circle; under this paragraph, the lessee shall, before 26 commencement of production testing and production activities on the lease, 27 (A) test each well for dissolved contents, including methane, 28 and water flow; and 29 (B) provide a copy of the test results to the land owner, who 30 shall maintain the test record; 31 (3) appropriate setbacks governing the placement by the lessee or
01 the lessee's agent of compressor stations on the lease; setbacks developed under 02 this paragraph must be determined with reference to the population density of 03 the parcel or parcels subject to the lease, the size of the owner's parcels, and the 04 general character of the land subject to the lease; the terms of the lease must 05 require the lessee or lessee's agent to negotiate to meet the requirement of this 06 paragraph, but the owner may not unreasonably withhold agreement; 07 (4) reasonable and appropriate measures to mitigate the noise of 08 compressors, engines, and other equipment operated by the lessee or the lessee's 09 agent of compressor stations on the lease; noise mitigation measures developed 10 under this paragraph must be determined with reference to the population 11 density of the parcel or parcels subject to the lease, the size of the owner's 12 parcels, and the general character of the land subject to the lease; the terms of 13 the lease shall require the lessee or lessee's agent to negotiate to meet the 14 requirement of this paragraph, but the owner may not unreasonably withhold 15 agreement; 16 (5) action at the time of the termination or abandonment of the 17 lease to require the lessee or the lessee's agent to restore, reclaim, or abate the 18 adverse effects of the exploration and development operations using natural 19 revegetation or reseeding using endemic plant species; the lease may require the 20 lessee or the lessee's agent to consult with the director of the division of 21 agriculture. 22 * Sec. 10. AS 38.05.177(k) is amended to read: 23 (k) The commissioner [MAY] 24 (1) may adopt only the regulations that are reasonable and that are 25 necessary to implement, interpret, or make specific the provisions of this section or to 26 establish procedures to govern application of the provisions of this section; [AND] 27 (2) may, in addition to any requirement for a bond under 28 AS 38.05.130, establish by regulation a form and amount for statewide, areawide, 29 unit-wide, or per-lease bonds sufficient to secure damages that may be caused by the 30 activities of a lessee, or the lessee's successors or assigns, related to a shallow natural 31 gas lease entered into under this section; if the commissioner acts under this
01 paragraph, the commissioner 02 (A) shall require a person applying for a lease under this 03 section to post the bond as a condition for the director's executing the lease; 04 (B) may not require a bond posted under this paragraph from a 05 person applying for a lease if the person has already posted a bond covering 06 the person's statewide oil and gas leasing activities in an amount of at least 07 $500,000; 08 (3) shall, if a bond is sought under AS 38.05.130, before the 09 amount of the surety bond to be posted is determined by the director, require as 10 a condition for issuing the bond that the director, after notice and an opportunity 11 to be heard, determine that, to exercise rights under the reservation as set out in 12 AS 38.05.125 and the lease, the lessee has demonstrated that access and entry 13 upon the land of the owner is reasonably necessary or convenient to render 14 beneficial and efficient the complete enjoyment of the property and the reserved 15 rights; the lessee has the burden of demonstrating compliance with the 16 requirement of this paragraph; and 17 (4) shall require the lessee to provide written advance notice to the 18 owner of initial entry onto the property of the owner at least 30 days before 19 initial entry. 20 * Sec. 11. AS 38.05.177 is amended by adding new subsections to read: 21 (p) Under AS 38.05.130 as applicable to shallow natural gas exploration and 22 development that is authorized under this section, if 23 (1) the owner and the lessee enter into an agreement by which the 24 lessee makes provision to pay the owner of the land for all damages, the parties shall 25 incorporate in the agreement the provisions described in (f) of this section that are 26 negotiated; 27 (2) the owner and the lessee do not enter into an agreement by which 28 the lessee makes provision to pay the owner of the land for all damages, and the lessee 29 proceeds to request the director to set the amount of a surety bond, the owner may, in 30 conjunction with notice and the opportunity to be heard, provide the director with the 31 owner's comments about the appropriate location of wells, roads, and other
01 improvements that may be made by the lessee or the lessee's agent to secure the 02 lessee's rights under the lease. 03 (q) In (f), (k)(3), and (p) of this section, "owner" means the property owner 04 whose property is subject to the reservation described in AS 38.05.125(a). 05 * Sec. 12. AS 38.05.180(ff) is repealed and reenacted to read: 06 (ff) The provisions of this section that authorize oil and gas leases also apply 07 to authorize the commissioner to issue leases under this section for the production of 08 gas only, subject to the following: 09 (1) in authorizing and managing leases under this subsection, the terms 10 "oil and gas" or "oil or gas" as they are used in this chapter shall be read and applied 11 as referring to gas only; 12 (2) when a lease is authorized as a gas only lease, the lease does not 13 give the lessee the right to produce oil; if a well drilling for gas under a gas only lease 14 authorized by this subsection penetrates a formation capable of producing oil, the 15 owner or operator 16 (A) shall notify the department and the Alaska Oil and Gas 17 Conservation Commission; and 18 (B) may not conduct further operations in the drilled well until 19 the facility complies with all applicable laws and regulations relating to oil and 20 gas exploration and production; however, this subparagraph does not prevent 21 the owner or operator from conducting activities that may be required by the 22 Alaska Oil and Gas Conservation Commission to plug, plug-back, or abandon 23 a well; 24 (3) if, under AS 38.05.130, as applicable to a nonconventional gas 25 lease 26 (A) the owner and the lessee enter into an agreement by which 27 the lessee makes provision to pay the owner of the land for all damages, the 28 parties shall incorporate in the agreement the provisions described in (4)(A) - 29 (D) of this subsection that are negotiated; or 30 (B) the owner and the lessee do not enter into an agreement by 31 which the state, or its lessees, successors, or assigns, will make provision to
01 pay the owner of the land for all damages, and the lessee proceeds to request 02 the director to set the amount of a surety bond, the owner may, in conjunction 03 with notice and the opportunity to be heard, provide the director with the 04 owner's comments about the appropriate location of wells, roads, and other 05 improvements that may be made by the lessee or the lessee's agent to secure 06 the lessee's rights under the lease. 07 (4) for a nonconventional gas lease, 08 (A) the lease must provide for a water well testing requirement 09 for each lease that contains one or more wells that serve as a source of potable 10 water; the testing requirement of this subparagraph applies to each water well 11 that is located within a square that bounds a circle with a radius of one-quarter 12 mile around the drill site and the sides of which are parallel or perpendicular to 13 the four cardinal directions and are tangent to the circle; under this 14 subparagraph, the lessee shall, before commencement of production testing and 15 production activities on the lease, 16 (i) test each well for dissolved contents, including 17 methane, and water flow; and 18 (ii) provide a copy of the test results to the owner, who 19 shall maintain the test record; 20 (B) the lease must provide for appropriate setbacks governing 21 the placement by the lessee or the lessee's agent of compressor stations on the 22 lease; setbacks developed under this subparagraph must be determined with 23 reference to the population density of the parcel or parcels subject to the lease, 24 the size of the owner's parcels, and the general character of the land subject to 25 the lease; the terms of the lease must require the lessee or lessee's agent to 26 negotiate to meet the requirement of this subparagraph, but the owner may not 27 unreasonably withhold agreement; 28 (C) the lease must provide for reasonable and appropriate 29 measures to mitigate the noise of compressors, engines, and other equipment 30 operated by the lessee or the lessee's agent for compressor statements on the 31 lease; noise mitigation measures developed under this subparagraph must be
01 determined with reference to the population density of the parcel or parcels 02 subject to the lease, the size of the owner's parcels, and the general character of 03 the land subject to the lease; the terms of the lease shall require the lessee or 04 lessee's agent to negotiate to meet the requirement of this subparagraph, but the 05 owner may not unreasonably withhold agreement; 06 (D) the lease must provide for action at the time of the 07 termination or abandonment of the lease to require the lessee or the lessee's 08 agent to restore, reclaim, or abate the adverse effects of the exploration and 09 development operations using natural revegetation or reseeding using endemic 10 plant species; the lease may require the lessee or the lessee's agent to consult 11 with the director of the division of agriculture; 12 (E) if a bond is sought under AS 38.05.130, 13 (i) before the amount of the surety bond to be posted is 14 determined by the director, require, as a condition for issuing the lease, 15 that the director, after notice and an opportunity to be heard, determine 16 that, to exercise rights under the reservation as set out in AS 38.05.125 17 and the lease, the lessee has no other reasonable means of entry than 18 access and entry upon the land of the owner; the lessee has the burden 19 of demonstrating compliance with the requirement of this sub- 20 subparagraph; and 21 (ii) in addition to the coverage for actual damages 22 required by AS 38.05.130, provide for payment of reasonable 23 compensation to the owner for any loss by the owner of the owner's use 24 and enjoyment of the property; and 25 (F) the director shall require the lessee to provide written 26 advance notice to the owner of initial entry onto the property of the owner at 27 least 30 days before initial entry. 28 * Sec. 13. AS 38.05.945(a) is amended to read: 29 (a) This section establishes the requirements for notice given by the 30 department for the following actions: 31 (1) classification or reclassification of state land under AS 38.05.300
01 and the closing of land to mineral leasing or entry under AS 38.05.185; 02 (2) zoning of land under applicable law; 03 (3) issuance of a 04 (A) preliminary written finding under AS 38.05.035(e)(5)(A) 05 regarding the sale, lease, or disposal of an interest in state land or resources for 06 oil and gas subject to AS 38.05.180(b); 07 (B) [REPEALED 08 (C)] written finding for the sale, lease, or disposal of an interest 09 in state land or resources under AS 38.05.035(e)(6), except an oil or gas lease 10 sale described in AS 38.05.035(e)(6)(F) for which the director must provide 11 opportunity for public comment under the provisions of that subparagraph; 12 (4) a competitive disposal of an interest in state land or resources after 13 final decision under AS 38.05.035(e); 14 (5) a preliminary finding under AS 38.05.035(e) concerning sites for 15 aquatic farms and related hatcheries; 16 (6) a decision under AS 38.05.132 - 38.05.134 regarding the sale, 17 lease, or disposal of an interest in state land or resources; 18 (7) a notice of receipt of a lease application and call for comments 19 under AS 38.05.177(c). 20 * Sec. 14. AS 38.05.945(b) is amended to read: 21 (b) When notice is required to be given under this section, 22 (1) the notice must contain sufficient information in commonly 23 understood terms to inform the public of the nature of the action and the opportunity 24 of the public to comment on it; 25 (2) if the notice is of a preliminary written finding described in 26 (a)(3)(A) of this section or a call for comments under (a)(7) of this section, the 27 department shall give notice at the beginning of the public comment period for the 28 preliminary written finding or call for comments, as appropriate, notifying the 29 public of the right to submit comments; the department shall give notice by 30 (A) publication of a legal notice in newspapers of statewide 31 circulation and in newspapers of general circulation in the vicinity of the
01 proposed action at least once a week for two consecutive weeks; 02 (B) publication of a notice in display advertising form in the 03 newspapers described in (A) of this paragraph at least once a week for two 04 consecutive weeks; 05 (C) public service announcements on the electronic media 06 serving the area to be affected by the proposed action; and 07 (D) one or more of the following methods: 08 (i) posting in a conspicuous location in the vicinity of 09 the action; 10 (ii) notification of parties known or likely to be affected 11 by the action; or 12 (iii) another method calculated to reach affected parties; 13 (3) if the notice is of an action described in (a) of this section, other 14 than notice of an action under (a)(3)(A) or (a)(7) of this section, the department shall 15 give notice at least 30 days before the action by publication in newspapers of 16 statewide circulation and in newspapers of general circulation in the vicinity of the 17 proposed action and one or more of the following methods: 18 (A) publication through public service announcements on the 19 electronic media serving the area affected by the action; 20 (B) posting in a conspicuous location in the vicinity of the 21 action; 22 (C) notification of parties known or likely to be affected by the 23 action; or 24 (D) another method calculated to reach affected persons. 25 * Sec. 15. AS 38.05.945(b) is repealed and reenacted to read: 26 (b) When notice is required to be given under this section, 27 (1) the notice must contain sufficient information in commonly 28 understood terms to inform the public of the nature of the action and the opportunity 29 of the public to comment on it; 30 (2) if the notice is of a preliminary written finding described in 31 (a)(3)(A) of this section, the department shall give notice at the beginning of the public
01 comment period for the preliminary written finding, notifying the public of the right to 02 submit comments; the department shall give notice by 03 (A) publication of a legal notice in newspapers of statewide 04 circulation and in newspapers of general circulation in the vicinity of the 05 proposed action at least once a week for two consecutive weeks; 06 (B) publication of a notice in display advertising form in the 07 newspapers described in (A) of this paragraph at least once a week for two 08 consecutive weeks; 09 (C) public service announcements on the electronic media 10 serving the area to be affected by the proposed action; and 11 (D) one or more of the following methods: 12 (i) posting in a conspicuous location in the vicinity of 13 the action; 14 (ii) notification of parties known or likely to be affected 15 by the action; or 16 (iii) another method calculated to reach affected parties; 17 (3) if the notice is of an action described in (a) of this section, other 18 than notice of an action under (a)(3)(A) of this section, the department shall give 19 notice at least 30 days before the action by publication in newspapers of statewide 20 circulation and in newspapers of general circulation in the vicinity of the proposed 21 action and one or more of the following methods: 22 (A) publication through public service announcements on the 23 electronic media serving the area affected by the action; 24 (B) posting in a conspicuous location in the vicinity of the 25 action; 26 (C) notification of parties known or likely to be affected by the 27 action; or 28 (D) another method calculated to reach affected persons. 29 * Sec. 16. AS 46.03.100(f) is amended to read: 30 (f) This section does not apply to discharges of solid or liquid waste material 31 or water discharges from the following activities if the discharge is incidental to the
01 activity and the activity does not produce a discharge from a point source, as that term 02 is defined in regulations adopted under this chapter, directly into any surface water of 03 the state: 04 (1) mineral drilling, trenching, ditching, and similar activities; 05 (2) landscaping; 06 (3) water well drilling and [,] geophysical drilling [, OR COAL BED 07 METHANE DRILLING OR OTHER NATURAL GAS DRILLING TO RECOVER 08 GAS FROM A FIELD IF A PART OF THE FIELD IS WITHIN 3,000 FEET OF THE 09 SURFACE]; or 10 (4) drilling, ditching, trenching, and similar activities associated with 11 facility construction and maintenance or with road or other transportation facility 12 construction and maintenance; however, the exemption provided by this paragraph 13 does not relieve a person from obtaining a permit under this section if 14 (A) the drilling, ditching, trenching, or similar activity will 15 involve the removal of the groundwater, stormwater, or wastewater runoff that 16 has accumulated and is present at an excavation site for facility, road, or other 17 transportation construction or maintenance; and 18 (B) a permit is otherwise required by this section. 19 * Sec. 17. AS 46.04.030(b) is amended to read: 20 (b) A person may not cause or permit the operation of a pipeline or an 21 exploration or production facility in the state unless an oil discharge prevention and 22 contingency plan for the pipeline or facility has been approved by the department and 23 the person is in compliance with the plan. This subsection does not apply to an 24 exploration or production facility used solely to explore for or to develop or produce 25 nonconventional [SHALLOW NATURAL] gas resources, except that this exemption 26 does not apply if the Alaska Oil and Gas Conservation Commission determines under 27 AS 31.05.030(j) that 28 (1) a well drilled for shallow natural gas may penetrate a formation 29 capable of flowing oil; and 30 (2) the volume of oil encountered will be of such quantities that a 31 contingency plan will be required.
01 * Sec. 18. AS 46.04.900(25) is amended to read: 02 (25) "shallow natural gas" means coal bed methane, natural gas drilled 03 for under a lease authorized by AS 38.05.177, or natural gas drilled for in a well the 04 true vertical depth of which is 3,000 [4,000] feet or less; 05 * Sec. 19. AS 46.04.900 is amended by adding a new paragraph to read: 06 (31) "nonconventional gas" has the meaning given in AS 38.05.965. 07 * Sec. 20. The uncodified law of the State of Alaska added by sec. 1, ch. 45, SLA 2003, is 08 amended to read: 09 LEGISLATIVE FINDINGS. The legislature finds that 10 (1) [THE DEVELOPMENT OF SHALLOW NATURAL GAS 11 RESOURCES IS IN THE BEST INTERESTS OF THE STATE OF ALASKA; 12 (2)] shallow natural gas is abundant and widespread in Alaska and 13 bears the promise of providing Alaskans, particularly Alaskans living in rural areas, 14 with an inexpensive and clean source of energy if those resources can be economically 15 developed; 16 (2) [(3)] the development of shallow natural gas poses significantly 17 fewer risks and creates substantially less impact to the environment than traditional 18 deep oil and gas projects, which have served as the model for oil and gas industry and 19 environmental regulations to date in Alaska; 20 (3) [(4)] the regulatory requirements developed and applied to 21 traditional deep oil and gas projects in Alaska are ill-suited and unduly onerous when 22 applied to shallow natural gas projects, threatening the economic viability of otherwise 23 desirable exploration and development projects; 24 (4) [(5)] there is an immediate state and national need for the 25 development of clean and economical unconventional energy sources, such as shallow 26 natural gas resources; 27 (5) [(6)] reform of existing laws and regulations is needed to remove 28 unnecessary regulatory burdens on the private sector to foster and encourage the 29 development in Alaska of these necessary resources; 30 (6) [(7)] the legislature is acting in the interest of promoting the active 31 development of such resources, while ensuring that suitable measures are taken to
01 protect human health and safety and the natural environment, 02 (A) to remove impediments to the responsible development of 03 shallow natural gas; and 04 (B) to provide the proper state agencies with clear authority and 05 discretion to adopt regulatory practices appropriate to shallow natural gas 06 exploration and development projects, in recognition of the lower risks posed 07 by such projects to human health and safety and the natural environment [; 08 AND 09 (C) TO RESERVE ALL RIGHTS AND POWERS NOT 10 PREEMPTED BY FEDERAL LAW AND REGULATION IN ORDER TO 11 ASSERT STATE PRIMACY OVER THE REGULATION OF SHALLOW 12 NATURAL GAS]. 13 * Sec. 21. AS 31.05.125 and AS 38.05.177(n) are repealed. 14 * Sec. 22. AS 31.05.170(14), 38.05.945(a)(7); and AS 46.04.900(25) are repealed. 15 * Sec. 23. The uncodified law of the State of Alaska is amended by adding a new section to 16 read: 17 CONTINGENT EFFECT OF SECTIONS. Sections 2, 4, 6, 12, 15, 17, 19, and 22 of 18 this Act take effect only if a version of House Bill 531, "An Act relating to natural gas 19 exploration and development and to nonconventional gas, and amending the section under 20 which shallow natural gas leases may be issued" is passed by the Twenty-Third Alaska State 21 Legislature and becomes law. 22 * Sec. 24. If, under sec. 23 of this Act, secs. 2, 4, 6, 12, 15, 17, 19, and 22 of this Act take 23 effect, they take effect on the later of 24 (1) the day following the effective date of the Act described in sec. 23 of this 25 Act; or 26 (2) the day after the effective date of the sections of this Act not described in 27 this section. 28 * Sec. 25. Except as provided in sec. 24 of this Act, this Act takes effect July 1, 2004.