CSHB 395(FIN) am: "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(FIN) am 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 29.40.040 is amended by adding a new subsection to read: 08 (c) Land use regulations of a municipality adopted under this section 09 establishing allowable uses and limitations on nonconventional gas exploration and 10 development activities, including limitations that protect neighborhoods, protect the 11 safety of residents, and limit audible noise, shall be given effect to the fullest extent 12 allowed under the Constitution of the State of Alaska. 13 * Sec. 2. AS 31.05.030(j) is amended to read:
01 (j) For exploration and development operations involving shallow natural 02 gas, the commission 03 (1) may not 04 (A) issue a permit to drill under this chapter if the well 05 would be used to produce gas from an aquifer that serves as a source of 06 water for human consumption or agricultural purposes unless the 07 commission finds that the well will not adversely affect the aquifer as a 08 source of water for human consumption or agricultural purposes; or 09 (B) allow injection of produced water except at depths 10 below known sources of water for human consumption or agricultural 11 purposes; 12 (2) shall 13 (A) regulate hydraulic fracturing in shallow natural gas 14 wells to assure protection of drinking water quality; 15 (B) regulate the disposal of wastes produced from the 16 operations unless the disposal is otherwise subject to regulation by the 17 Department of Environmental Conservation or the Environmental 18 Protection Agency; and 19 (C) for the purposes of AS 46.04.030(b), [THE 20 COMMISSION SHALL] determine whether a well drilled for shallow natural 21 gas may penetrate a formation capable of flowing oil and, if so, whether the 22 volume of oil encountered will be of such quantities that an oil discharge 23 prevention and contingency plan will be required. 24 * Sec. 3. AS 31.05.030(j) is repealed and reenacted to read: 25 (j) For exploration and development operations involving nonconventional 26 gas, the commission 27 (1) may not 28 (A) issue a permit to drill under this chapter if the well would 29 be used to produce gas from an aquifer that serves as a source of water for 30 human consumption or agricultural purposes unless the commission finds that 31 the well will not adversely affect the aquifer as a source of water for human
01 consumption or agricultural purposes; or 02 (B) allow injection of produced water except at depths below 03 known sources of water for human consumption or agricultural purposes; 04 (2) shall 05 (A) regulate hydraulic fracturing in nonconventional gas wells 06 to assure protection of drinking water quality; 07 (B) regulate the disposal of wastes produced from the 08 operations unless the disposal is otherwise subject to regulation by the 09 Department of Environmental Conservation or the Environmental Protection 10 Agency; and 11 (C) for the purposes of AS 46.04.030(b), determine whether a 12 well drilled for nonconventional gas may penetrate a formation capable of 13 flowing oil and, if so, whether the volume of oil encountered will be of such 14 quantities that an oil discharge prevention and contingency plan will be 15 required. 16 * Sec. 4. AS 31.05 is amended by adding a new section to read: 17 Sec. 31.05.098. Public forum process concerning shallow natural gas. (a) 18 For the purpose of resolving public health, safety, welfare, or environmental 19 complaints about potential or actual shallow natural gas exploration and development 20 operations, the commission shall, by regulation, develop and implement a public 21 forum process by which to achieve informal resolution of the complaints within 60 22 days of the filing of the complaints. The commission may provide that, if resolution 23 of the complaints is not achieved through the informal process established by 24 regulation, a party may petition the commission to take action on the complaint under 25 AS 31.05.060 - 31.05.085 as to a matter that falls within the commission's powers and 26 duties under AS 31.05.030. For any other matter, the commission shall refer the 27 complaint to other federal, state, or local agencies, as appropriate. 28 (b) The commission's regulations adopted under this section shall provide for 29 scheduling a public forum at a location reasonably proximate to the land that is the 30 subject of or that is affected by the complaint and reasonable public notice and 31 opportunity to be heard. If the public forum is not personally convened and conducted
01 by a majority of the members of the commission, the person conducting the forum 02 shall prepare and submit to the commission a report of the forum proceedings. The 03 report prepared under this subsection is a public record. The commission may modify 04 a rule or condition in a plan of development or operation for a field or pool to address 05 an issue identified by the commission or the report. 06 * Sec. 5. AS 31.05.098(a) is repealed and reenacted to read: 07 (a) For the purpose of resolving public health, safety, welfare, or 08 environmental complaints about potential or actual nonconventional gas exploration 09 and development operations, the commission shall, by regulation, develop and 10 implement a public forum process by which to achieve informal resolution of the 11 complaints within 60 days of the filing of the complaints. The commission may 12 provide that, if resolution of the complaints is not achieved through the informal 13 process established by regulation, a party may petition the commission to take action 14 on the complaint under AS 31.05.060 - 31.05.085 as to a matter that falls within the 15 commission's powers and duties under AS 31.05.030. For any other matter, the 16 commission shall refer the complaint to other federal, state, or local agencies, as 17 appropriate. 18 * Sec. 6. AS 31.05.170(14) is amended to read: 19 (14) "shallow natural gas" means coal bed methane, natural gas drilled 20 for under a lease authorized by AS 38.05.177, or natural gas drilled for in a well the 21 true vertical depth of which is 3,000 [4,000] feet or less; 22 * Sec. 7. AS 31.05.170 is amended by adding a new paragraph to read: 23 (16) "nonconventional gas" has the meaning given in AS 38.05.965. 24 * Sec. 8. AS 34 is amended by adding a new chapter to read: 25 Chapter 90. Mineral Interests. 26 Sec. 34.90.010. Notice of operations. (a) Except for activities governed by 27 AS 38.05, the developer shall give the surface owner written notice of the oil and gas 28 operations contemplated at least 20 days before commencement of operations. The 29 requirement of written notice may be waived by the parties. 30 (b) Unless notice has been waived by the parties, the developer shall give 31 notice to the record surface owner at the owner's address as shown by the records of
01 the state recorder at the time notice is given. The notice must sufficiently disclose the 02 plan of work and operations to enable the surface owner to evaluate the effect of oil 03 and gas operations on the surface owner's use of the property. 04 (c) If a developer fails to give notice as provided in this section, the surface 05 owner may seek any appropriate relief in the court of proper jurisdiction and may 06 receive actual damages. 07 Sec. 34.90.020. Damages and posting of bond. A developer may not 08 exercise a right of entry until the developer makes provision to pay the surface owner 09 full payment for all damages sustained by the surface owner by reason of entering 10 upon the land. If the surface owner, for any cause, refuses or neglects to settle the 11 damages, the developer may enter upon the land after posting a surety bond 12 determined by the Department of Natural Resources using a procedure similar to the 13 procedure used to administer AS 38.05.130, including notice and an opportunity to be 14 heard. The bond must be sufficient as to form, amount, and security to secure to the 15 surface owner payment for damages. The surface owner may institute legal 16 proceedings in a court where the land is located as may be necessary to determine the 17 damages that the surface owner may suffer. 18 Sec. 34.90.095. Definitions. In this chapter, 19 (1) "developer" means the person who acquires the mineral estate or 20 lease for the purpose of extracting or using the minerals; 21 (2) "mineral estate" means an estate in or ownership of all or part of 22 the minerals underlying a specific tract of land; 23 (3) "minerals" includes oil and gas; 24 (4) "oil and gas operations" means an activity for which a permit is 25 required by AS 31.05.090 that requires entry upon the surface estate; 26 (5) "surface estate" means an estate in or ownership of the surface of a 27 particular tract of land; 28 (6) "surface owner" means any person who holds record title to the 29 surface of the land as an owner. 30 * Sec. 9. AS 38.05.177(c) is amended to read: 31 (c) The director shall give notice under AS 38.05.945 of receipt of the lease
01 application, [AND] call for comments from the public, and execute a lease as 02 follows: 03 (1) the [. THE] director's call for public comments must provide 04 opportunity for public comment for a period of not less than 60 days; 05 (2) if [. IF], after review of information received during the public 06 comment period and consideration of public comments received, the director 07 determines that the discovery of a local source of natural gas would benefit the 08 residents of an area, the director may [SHALL] execute a lease for the area described 09 in (b) of this section; the [. THE] director may [SHALL] execute the lease only after 10 completion of a title search, the close of the public comment period, and, if review is 11 required under AS 46.40, after the final consistency determination is made under 12 AS 46.40; 13 (3) a [. A] lease entered into under this subsection gives the lessee the 14 exclusive right to explore for, develop, and produce, for a term of three years, natural 15 gas on the state land described in the lease; the right to explore for, develop, and 16 produce is limited to gas from a field if a part of the field is within 3,000 feet of the 17 surface. 18 * Sec. 10. AS 38.05.177(f) is amended to read: 19 (f) A shallow gas lease must provide for 20 (1) payment to the state of annual rent in the amount of $1 an [PER] 21 acre; the [. THE] rent is due and payable on the date determined in the lease; if [. IF] 22 the lease payment is not received by the due date, the director shall mail the lessee one 23 written notice, certified return receipt requested; if [. IF] the lessee fails to pay the 24 rent within 30 days after [OF] receipt of the notice, the director shall terminate the 25 lease; 26 (2) a water well testing requirement for each lease that contains 27 one or more wells that serve as a source of potable water; the testing requirement 28 of this paragraph applies to each water well that is located within a square that 29 bounds a circle with a radius of one-quarter mile around the drill site and the 30 sides of which are parallel or perpendicular to the four cardinal directions and 31 are tangent to the circle; under this paragraph, the lessee shall, before
01 commencement of production testing and production activities on the lease, 02 (A) test each well for dissolved contents, including methane, 03 and water flow; and 04 (B) provide a copy of the test results to the land owner, who 05 shall maintain the test record; 06 (3) appropriate setbacks governing the placement by the lessee or 07 the lessee's agent of compressor stations on the lease; setbacks developed under 08 this paragraph must be determined with reference to the population density of 09 the parcel or parcels subject to the lease, the size of the owner's parcels, and the 10 general character of the land subject to the lease; the terms of the lease must 11 require the lessee or lessee's agent to negotiate to meet the requirement of this 12 paragraph, but the owner may not unreasonably withhold agreement; 13 (4) reasonable and appropriate measures to mitigate the noise of 14 compressors, engines, and other equipment operated by the lessee or the lessee's 15 agent of compressor stations on the lease; noise mitigation measures developed 16 under this paragraph must be determined with reference to the population 17 density of the parcel or parcels subject to the lease, the size of the owner's 18 parcels, and the general character of the land subject to the lease; the terms of 19 the lease shall require the lessee or lessee's agent to negotiate to meet the 20 requirement of this paragraph, but the owner may not unreasonably withhold 21 agreement; 22 (5) action at the time of the termination or abandonment of the 23 lease to require the lessee or the lessee's agent to restore, reclaim, or abate the 24 adverse effects of the exploration and development operations using natural 25 revegetation or reseeding using endemic plant species; the lease may require the 26 lessee or the lessee's agent to consult with the director of the division of 27 agriculture. 28 * Sec. 11. AS 38.05.177(h) is amended to read: 29 (h) A lease issued under this section is subject to the following terms and 30 conditions and may be terminated by the director in the event of a breach of a term or 31 condition:
01 (1) the lessee may surrender the lease or relinquish part of the lease at 02 any time; however, a lease or part of a lease that was issued under this section 03 before the effective date of this bill section and that is surrendered or 04 relinquished under this paragraph may not again be leased under this section 05 unless the lease complies with the provisions of this section as it reads on the 06 effective date of this bill section; 07 (2) the lease may not be transferred or assigned until a well capable of 08 production of gas in paying quantities has been drilled on the lease; however, this 09 paragraph does not prohibit the lessee from entering into a farm out agreement or 10 similar arrangement with a third party under which the third party assists in 11 exploration and development of production from the lease if the agreement or 12 arrangement does not require a payment of consideration by the third party to the 13 lessee, except that the lessee may retain an overriding royalty interest in the lease or 14 may retain a net profit or other production payment; 15 (3) unless provision is otherwise made in the lease by the Alaska 16 Oil and Gas Conservation Commission under AS 31.05.030(j) that would govern 17 the lessee's disposal of water produced from a coal seam as salt water or 18 nonpotable water in a manner that does not add to or contaminate surface or 19 subsurface water supplies, the lease must contain a term or condition that 20 governs the lessee's disposal of the produced water in a manner that does not add 21 to or contaminate surface water supplies; and 22 (4) the lease must contain a term or condition that protects the 23 water quality, water quantity, and habitat of fish-bearing surface water; the term 24 or condition may not take effect until approved by the commissioner of fish and 25 game. 26 * Sec. 12. AS 38.05.177(k) is amended to read: 27 (k) The commissioner [MAY] 28 (1) may adopt only the regulations that are reasonable and that are 29 necessary to implement, interpret, or make specific the provisions of this section or to 30 establish procedures to govern application of the provisions of this section; [AND] 31 (2) may, in addition to any requirement for a bond under
01 AS 38.05.130, establish by regulation a form and amount for statewide, areawide, 02 unit-wide, or per-lease bonds sufficient to secure damages that may be caused by the 03 activities of a lessee, or the lessee's successors or assigns, related to a shallow natural 04 gas lease entered into under this section; if the commissioner acts under this 05 paragraph, the commissioner 06 (A) shall require a person applying for a lease under this 07 section to post the bond as a condition for the director's executing the lease; 08 (B) may not require a bond posted under this paragraph from a 09 person applying for a lease if the person has already posted a bond covering 10 the person's statewide oil and gas leasing activities in an amount of at least 11 $500,000; 12 (3) shall, if a bond is sought under AS 38.05.130, before the 13 amount of the surety bond to be posted is determined by the director, require as 14 a condition for issuing the bond that the director, after notice and an opportunity 15 to be heard, determine that, to exercise rights under the reservation as set out in 16 AS 38.05.125 and the lease, the lessee has demonstrated that access and entry 17 upon the land of the owner is reasonably necessary or convenient to render 18 beneficial and efficient the complete enjoyment of the property and the reserved 19 rights; the lessee has the burden of demonstrating compliance with the 20 requirement of this paragraph; 21 (4) shall require the lessee to provide written advance notice to the 22 owner of initial entry onto the property of the owner at least 30 days before 23 initial entry; 24 (5) for management and oversight of nonconventional gas, shall 25 adopt regulations under AS 38.05.127(b) and this paragraph to ensure that 26 exploration and development activities under a gas only lease for 27 nonconventional gas do not materially interfere with the public's right to access 28 and enjoy recreational waters, waters that contain appreciable quantities of 29 resident or anadromous fish, and areas important to sport or subsistence hunting 30 activities. 31 * Sec. 13. AS 38.05.177 is amended by adding new subsections to read:
01 (p) Under AS 38.05.130 as applicable to shallow natural gas exploration and 02 development that is authorized under this section, if 03 (1) the owner and the lessee enter into an agreement by which the 04 lessee makes provision to pay the owner of the land for all damages, the parties shall 05 incorporate in the agreement the provisions described in (f) of this section that are 06 negotiated; 07 (2) the owner and the lessee do not enter into an agreement by which 08 the lessee makes provision to pay the owner of the land for all damages, and the lessee 09 proceeds to request the director to set the amount of a surety bond, the owner may, in 10 conjunction with notice and the opportunity to be heard, provide the director with the 11 owner's comments about the appropriate location of wells, roads, and other 12 improvements that may be made by the lessee or the lessee's agent to secure the 13 lessee's rights under the lease. 14 (q) In (f), (k)(3), and (p) of this section, "owner" means the property owner 15 whose property is subject to the reservation described in AS 38.05.125(a). 16 * Sec. 14. AS 38.05.180(ff) is repealed and reenacted to read: 17 (ff) The provisions of this section that authorize oil and gas leases also apply 18 to authorize the commissioner to issue leases under this section for the production of 19 gas only, subject to the following: 20 (1) in authorizing and managing leases under this subsection, the terms 21 "oil and gas" or "oil or gas" as they are used in this chapter shall be read and applied 22 as referring to gas only; 23 (2) when a lease is authorized as a gas only lease, the lease does not 24 give the lessee the right to produce oil; if a well drilling for gas under a gas only lease 25 authorized by this subsection penetrates a formation capable of producing oil, the 26 owner or operator 27 (A) shall notify the department and the Alaska Oil and Gas 28 Conservation Commission; and 29 (B) may not conduct further operations in the drilled well until 30 the facility complies with all applicable laws and regulations relating to oil and 31 gas exploration and production; however, this subparagraph does not prevent
01 the owner or operator from conducting activities that may be required by the 02 Alaska Oil and Gas Conservation Commission to plug, plug-back, or abandon 03 a well; 04 (3) if, under AS 38.05.130, as applicable to a nonconventional gas 05 lease 06 (A) the owner and the lessee enter into an agreement by which 07 the lessee makes provision to pay the owner of the land for all damages, the 08 parties shall incorporate in the agreement the provisions described in (4)(A) - 09 (D) of this subsection that are negotiated; or 10 (B) the owner and the lessee do not enter into an agreement by 11 which the state, or its lessees, successors, or assigns, will make provision to 12 pay the owner of the land for all damages, and the lessee proceeds to request 13 the director to set the amount of a surety bond, the owner may, in conjunction 14 with notice and the opportunity to be heard, provide the director with the 15 owner's comments about the appropriate location of wells, roads, and other 16 improvements that may be made by the lessee or the lessee's agent to secure 17 the lessee's rights under the lease. 18 (4) for a nonconventional gas lease, 19 (A) the lease must provide for a water well testing requirement 20 for each lease that contains one or more wells that serve as a source of potable 21 water; the testing requirement of this subparagraph applies to each water well 22 that is located within a square that bounds a circle with a radius of one-quarter 23 mile around the drill site and the sides of which are parallel or perpendicular to 24 the four cardinal directions and are tangent to the circle; under this 25 subparagraph, the lessee shall, before commencement of production testing and 26 production activities on the lease, 27 (i) test each well for dissolved contents, including 28 methane, and water flow; and 29 (ii) provide a copy of the test results to the owner, who 30 shall maintain the test record; 31 (B) the lease must provide for appropriate setbacks governing
01 the placement by the lessee or the lessee's agent of compressor stations on the 02 lease; setbacks developed under this subparagraph must be determined with 03 reference to the population density of the parcel or parcels subject to the lease, 04 the size of the owner's parcels, and the general character of the land subject to 05 the lease; the terms of the lease must require the lessee or lessee's agent to 06 negotiate to meet the requirement of this subparagraph, but the owner may not 07 unreasonably withhold agreement; 08 (C) the lease must provide for reasonable and appropriate 09 measures to mitigate the noise of compressors, engines, and other equipment 10 operated by the lessee or the lessee's agent for compressor statements on the 11 lease; noise mitigation measures developed under this subparagraph must be 12 determined with reference to the population density of the parcel or parcels 13 subject to the lease, the size of the owner's parcels, and the general character of 14 the land subject to the lease; the terms of the lease shall require the lessee or 15 lessee's agent to negotiate to meet the requirement of this subparagraph, but the 16 owner may not unreasonably withhold agreement; 17 (D) the lease must provide for action at the time of the 18 termination or abandonment of the lease to require the lessee or the lessee's 19 agent to restore, reclaim, or abate the adverse effects of the exploration and 20 development operations using natural revegetation or reseeding using endemic 21 plant species; the lease may require the lessee or the lessee's agent to consult 22 with the director of the division of agriculture; 23 (E) if a bond is sought under AS 38.05.130, 24 (i) before the amount of the surety bond to be posted is 25 determined by the director, require, as a condition for issuing the lease, 26 that the director, after notice and an opportunity to be heard, determine 27 that, to exercise rights under the reservation as set out in AS 38.05.125 28 and the lease, the lessee has no other reasonable means of entry than 29 access and entry upon the land of the owner; the lessee has the burden 30 of demonstrating compliance with the requirement of this sub- 31 subparagraph; and
01 (ii) in addition to the coverage for actual damages 02 required by AS 38.05.130, provide for payment of reasonable 03 compensation to the owner for any loss by the owner of the owner's use 04 and enjoyment of the property; and 05 (F) the director shall require the lessee to provide written 06 advance notice to the owner of initial entry onto the property of the owner at 07 least 30 days before initial entry; 08 (5) for management and oversight of nonconventional gas, 09 (A) the commissioner shall adopt regulations under 10 AS 38.05.127(b) and this subparagraph to ensure that exploration and 11 development activities under a gas only lease for nonconventional gas do not 12 materially interfere with the public's right to access and enjoy recreational 13 waters, waters that contain appreciable quantities of resident or anadromous 14 fish, and areas important to sport or subsistence hunting activities; 15 (B) unless provision is otherwise made in the lease by the 16 Alaska Oil and Gas Conservation Commission under AS 31.05.030(j) that 17 would govern the lessee's disposal of water produced from a coal seam as salt 18 water or nonpotable water in a manner that does not add to or contaminate 19 surface or subsurface water supplies, the lease must contain a term or condition 20 that governs the lessee's disposal of the produced water in a manner that does 21 not add to or contaminate surface water supplies; and 22 (C) the lease must contain a term or condition that protects the 23 water quality, water quantity, and habitat of fish-bearing surface water; the 24 term or condition may not take effect until approved by the commissioner of 25 fish and game. 26 * Sec. 15. AS 38.05.945(a) is amended to read: 27 (a) This section establishes the requirements for notice given by the 28 department for the following actions: 29 (1) classification or reclassification of state land under AS 38.05.300 30 and the closing of land to mineral leasing or entry under AS 38.05.185; 31 (2) zoning of land under applicable law;
01 (3) issuance of a 02 (A) preliminary written finding under AS 38.05.035(e)(5)(A) 03 regarding the sale, lease, or disposal of an interest in state land or resources for 04 oil and gas subject to AS 38.05.180(b); 05 (B) [REPEALED 06 (C)] written finding for the sale, lease, or disposal of an interest 07 in state land or resources under AS 38.05.035(e)(6), except an oil or gas lease 08 sale described in AS 38.05.035(e)(6)(F) for which the director must provide 09 opportunity for public comment under the provisions of that subparagraph; 10 (4) a competitive disposal of an interest in state land or resources after 11 final decision under AS 38.05.035(e); 12 (5) a preliminary finding under AS 38.05.035(e) concerning sites for 13 aquatic farms and related hatcheries; 14 (6) a decision under AS 38.05.132 - 38.05.134 regarding the sale, 15 lease, or disposal of an interest in state land or resources; 16 (7) a notice of receipt of a lease application and call for comments 17 under AS 38.05.177(c). 18 * Sec. 16. AS 38.05.945(b) is amended to read: 19 (b) When notice is required to be given under this section, 20 (1) the notice must contain sufficient information in commonly 21 understood terms to inform the public of the nature of the action and the opportunity 22 of the public to comment on it; 23 (2) if the notice is of a preliminary written finding described in 24 (a)(3)(A) of this section or a call for comments under (a)(7) of this section, the 25 department shall give notice at the beginning of the public comment period for the 26 preliminary written finding or call for comments, as appropriate, notifying the 27 public of the right to submit comments; the department shall give notice by 28 (A) publication of a legal notice in newspapers of statewide 29 circulation and in newspapers of general circulation in the vicinity of the 30 proposed action at least once a week for two consecutive weeks; 31 (B) publication of a notice in display advertising form in the
01 newspapers described in (A) of this paragraph at least once a week for two 02 consecutive weeks; 03 (C) public service announcements on the electronic media 04 serving the area to be affected by the proposed action; and 05 (D) one or more of the following methods: 06 (i) posting in a conspicuous location in the vicinity of 07 the action; 08 (ii) notification of parties known or likely to be affected 09 by the action; or 10 (iii) another method calculated to reach affected parties; 11 (3) if the notice is of an action described in (a) of this section, other 12 than notice of an action under (a)(3)(A) or (a)(7) of this section, the department shall 13 give notice at least 30 days before the action by publication in newspapers of 14 statewide circulation and in newspapers of general circulation in the vicinity of the 15 proposed action and one or more of the following methods: 16 (A) publication through public service announcements on the 17 electronic media serving the area affected by the action; 18 (B) posting in a conspicuous location in the vicinity of the 19 action; 20 (C) notification of parties known or likely to be affected by the 21 action; or 22 (D) another method calculated to reach affected persons. 23 * Sec. 17. AS 38.05.945(b) is repealed and reenacted to read: 24 (b) When notice is required to be given under this section, 25 (1) the notice must contain sufficient information in commonly 26 understood terms to inform the public of the nature of the action and the opportunity 27 of the public to comment on it; 28 (2) if the notice is of a preliminary written finding described in 29 (a)(3)(A) of this section, the department shall give notice at the beginning of the public 30 comment period for the preliminary written finding, notifying the public of the right to 31 submit comments; the department shall give notice by
01 (A) publication of a legal notice in newspapers of statewide 02 circulation and in newspapers of general circulation in the vicinity of the 03 proposed action at least once a week for two consecutive weeks; 04 (B) publication of a notice in display advertising form in the 05 newspapers described in (A) of this paragraph at least once a week for two 06 consecutive weeks; 07 (C) public service announcements on the electronic media 08 serving the area to be affected by the proposed action; and 09 (D) one or more of the following methods: 10 (i) posting in a conspicuous location in the vicinity of 11 the action; 12 (ii) notification of parties known or likely to be affected 13 by the action; or 14 (iii) another method calculated to reach affected parties; 15 (3) if the notice is of an action described in (a) of this section, other 16 than notice of an action under (a)(3)(A) of this section, the department shall give 17 notice at least 30 days before the action by publication in newspapers of statewide 18 circulation and in newspapers of general circulation in the vicinity of the proposed 19 action and one or more of the following methods: 20 (A) publication through public service announcements on the 21 electronic media serving the area affected by the action; 22 (B) posting in a conspicuous location in the vicinity of the 23 action; 24 (C) notification of parties known or likely to be affected by the 25 action; or 26 (D) another method calculated to reach affected persons. 27 * Sec. 18. AS 46.03.100(f) is amended to read: 28 (f) This section does not apply to discharges of solid or liquid waste material 29 or water discharges from the following activities if the discharge is incidental to the 30 activity and the activity does not produce a discharge from a point source, as that term 31 is defined in regulations adopted under this chapter, directly into any surface water of
01 the state: 02 (1) mineral drilling, trenching, ditching, and similar activities; 03 (2) landscaping; 04 (3) water well drilling and [,] geophysical drilling [, OR COAL BED 05 METHANE DRILLING OR OTHER NATURAL GAS DRILLING TO RECOVER 06 GAS FROM A FIELD IF A PART OF THE FIELD IS WITHIN 3,000 FEET OF THE 07 SURFACE]; or 08 (4) drilling, ditching, trenching, and similar activities associated with 09 facility construction and maintenance or with road or other transportation facility 10 construction and maintenance; however, the exemption provided by this paragraph 11 does not relieve a person from obtaining a permit under this section if 12 (A) the drilling, ditching, trenching, or similar activity will 13 involve the removal of the groundwater, stormwater, or wastewater runoff that 14 has accumulated and is present at an excavation site for facility, road, or other 15 transportation construction or maintenance; and 16 (B) a permit is otherwise required by this section. 17 * Sec. 19. AS 46.04.030(b) is amended to read: 18 (b) A person may not cause or permit the operation of a pipeline or an 19 exploration or production facility in the state unless an oil discharge prevention and 20 contingency plan for the pipeline or facility has been approved by the department and 21 the person is in compliance with the plan. This subsection does not apply to an 22 exploration or production facility used solely to explore for or to develop or produce 23 nonconventional [SHALLOW NATURAL] gas resources, except that this exemption 24 does not apply if the Alaska Oil and Gas Conservation Commission determines under 25 AS 31.05.030(j) that 26 (1) a well drilled for shallow natural gas may penetrate a formation 27 capable of flowing oil; and 28 (2) the volume of oil encountered will be of such quantities that a 29 contingency plan will be required. 30 * Sec. 20. AS 46.04.900(25) is amended to read: 31 (25) "shallow natural gas" means coal bed methane, natural gas drilled
01 for under a lease authorized by AS 38.05.177, or natural gas drilled for in a well the 02 true vertical depth of which is 3,000 [4,000] feet or less; 03 * Sec. 21. AS 46.04.900 is amended by adding a new paragraph to read: 04 (31) "nonconventional gas" has the meaning given in AS 38.05.965. 05 * Sec. 22. The uncodified law of the State of Alaska added by sec. 1, ch. 45, SLA 2003, is 06 amended to read: 07 LEGISLATIVE FINDINGS. The legislature finds that 08 (1) [THE DEVELOPMENT OF SHALLOW NATURAL GAS RESOURCES 09 IS IN THE BEST INTERESTS OF THE STATE OF ALASKA; 10 (2)] shallow natural gas is abundant and widespread in Alaska and bears the 11 promise of providing Alaskans, particularly Alaskans living in rural areas, with an 12 inexpensive and clean source of energy if those resources can be economically developed; 13 (2) [(3)] the development of shallow natural gas poses significantly fewer 14 risks and creates substantially less impact to the environment than traditional deep oil and gas 15 projects, which have served as the model for oil and gas industry and environmental 16 regulations to date in Alaska; 17 (3) [(4)] the regulatory requirements developed and applied to traditional deep 18 oil and gas projects in Alaska are ill-suited and unduly onerous when applied to shallow 19 natural gas projects, threatening the economic viability of otherwise desirable exploration and 20 development projects; 21 (4) [(5)] there is an immediate state and national need for the development of 22 clean and economical unconventional energy sources, such as shallow natural gas resources; 23 (5) [(6)] reform of existing laws and regulations is needed to remove 24 unnecessary regulatory burdens on the private sector to foster and encourage the development 25 in Alaska of these necessary resources; 26 (6) [(7)] the legislature is acting in the interest of promoting the active 27 development of such resources, while ensuring that suitable measures are taken to protect 28 human health and safety and the natural environment, 29 (A) to remove impediments to the responsible development of shallow 30 natural gas; and 31 (B) to provide the proper state agencies with clear authority and
01 discretion to adopt regulatory practices appropriate to shallow natural gas exploration 02 and development projects, in recognition of the lower risks posed by such projects to 03 human health and safety and the natural environment [; AND 04 (C) TO RESERVE ALL RIGHTS AND POWERS NOT 05 PREEMPTED BY FEDERAL LAW AND REGULATION IN ORDER TO ASSERT 06 STATE PRIMACY OVER THE REGULATION OF SHALLOW NATURAL GAS]. 07 * Sec. 23. AS 31.05.125 and AS 38.05.177(n) are repealed. 08 * Sec. 24. AS 31.05.170(14), 38.05.945(a)(7); and AS 46.04.900(25) are repealed. 09 * Sec. 25. The uncodified law of the State of Alaska is amended by adding a new section to 10 read: 11 APPLICABILITY. The provisions of AS 38.05.177(c), as amended by sec. 9 of this 12 Act, 38.05.177(f), as amended by sec. 10 of this Act, 38.05.177(h), as amended by sec. 11 of 13 this Act, 38.05.177(k), as amended by sec. 12 of this Act, and 38.05.177(p) and (q), added by 14 sec. 13 of this Act, apply to leases issued under AS 38.05.177 and in effect on the effective 15 date of secs. 9 - 13 of this Act. 16 * Sec. 26. The uncodified law of the State of Alaska is amended by adding a new section to 17 read: 18 CERTAIN LEASES ISSUED UNDER FORMER AS 38.05.177 AND 19 SURRENDERED OR RELINQUISHED MAY NOT BE AGAIN BE LEASED. A lease or 20 part of a lease that was issued under former AS 38.05.177 before the effective date of this 21 section and that is surrendered or relinquished under former AS 38.05.177(h)(1) may not 22 again be leased unless the lease complies with the provisions of AS 38.05.180(ff), as repealed 23 and reenacted by sec. 14 of this Act. 24 * Sec. 27. The uncodified law of the State of Alaska is amended by adding a new section to 25 read: 26 CONTINGENT EFFECT OF SECTIONS. Sections 3, 5, 7, 14, 17, 19, 21, 24, and 26 27 of this Act take effect only if a version of House Bill 531, "An Act relating to natural gas 28 exploration and development and to nonconventional gas, and amending the section under 29 which shallow natural gas leases may be issued" is passed by the Twenty-Third Alaska State 30 Legislature and becomes law. 31 * Sec. 28. If, under sec. 27 of this Act, secs. 3, 5, 7, 14, 17, 19, 21, 24, and 26 of this Act
01 take effect, they take effect on the later of 02 (1) the day following the effective date of the Act described in sec. 27 of this 03 Act; or 04 (2) the day after the effective date of the sections of this Act not described in 05 this section. 06 * Sec. 29. Except as provided in sec. 28 of this Act, this Act takes effect July 1, 2004.