1996-01-26                     Senate Journal                      Page 2226
SB 245                                                                       
SENATE BILL NO. 245 BY THE SENATE RULES COMMITTEE                              
BY REQUEST OF THE GOVERNOR, entitled:                                          
                                                                               
An Act relating to best interest findings for oil and                         
gas lease sales for the area onshore and north of the                          
Umiat baseline.                                                                
                                                                               
was read the first time and referred to the Resources and Finance              
Committees.                                                                    
                                                                               
Zero fiscal note published today from Department of Natural                    
Resources.                                                                     
                                                                               
Governor's transmittal letter dated January 26:                                
                                                                               
Dear President Pearce:                                                         
                                                                               
Under the authority of art. III, sec. 18, of the Alaska Constitution,          
I  am  transmitting a bill  that streamlines the process for annual oil        

1996-01-26                     Senate Journal                      Page 2227
SB 245                                                                       
and gas lease sales on the North Slope.  This bill changes the                 
method of making best interest findings for leasing onshore areas of           
the North Slope.  These changes are part of the Administrations                
continuing effort to make the states oil and gas leasing program               
competitive in the international market, while ensuring that                   
development occurs in an environmentally responsible manner.                   
                                                                               
Area-wide oil and gas lease sales are permitted under current law              
with no statutory acreage limitation for the sales.  This gives the            
commissioner of the Department of Natural Resources broad                      
discretion in determining what acreage to place in the states five-            
year oil and gas leasing program.  But best interest findings are now          
done for each individual lease sale.  Under this proposal, the                 
department will not have to issue a new best interest finding before           
each North Slope sale; a single best interest finding would be made            
for all area tracts offered over the 5-year sale period.  This increases       
the certainty that oil and gas leases will be offered each year.               
                                                                               
This new process will not prevent the Department of Natural                    
Resources from amending a best interest finding.  The department               
will analyze any new information and revise a finding as necessary.            
Another aspect of this bill would allow the state to put land in the           
annual lease sale as the state receives title from the federal                 
government by requiring only that the acreage has been subject to a            
best interest finding in the previous five years, instead of having            
actually been offered for sale.                                                
                                                                               
This proposal for area-wide leasing ensures sound environmental                
development of the North Slope under a streamlined process --                  
providing industry the certainty of annual lease sales and regulatory          
efficiency, and providing the state the benefits of jobs and enhanced          
development opportunities.  I urge your prompt consideration and               
passage of this bill.                                                          
                                                                               
						Sincerely,                                                               
						/s/                                                                      
						Tony Knowles                                                             
						Governor