Legislature(1997 - 1998)

1998-03-12 Senate Journal

Full Journal pdf

1998-03-12                     Senate Journal                      Page 2844
SB 342                                                                       
SENATE BILL NO. 342 BY THE SENATE RULES COMMITTEE                              
BY REQUEST OF THE GOVERNOR, entitled:                                          
An Act approving the sale of Prudhoe Bay Unit                                 
royalty oil by the State of Alaska to Mapco Alaska                             
Petroleum, Inc.; and providing for an effective date.                          
was read the first time and referred to the Resources and Finance              
The following reports relating to SENATE BILL NO. 342 and                      
HOUSE BILL NO. 469 were received and will be published in                      
House and Senate Joint Journal Supplement No. 16                               
Agreement for the Sale and Purchase of State                                  
Royalty Oil to Mapco Alaska Petroleum, Inc. from                               
the Department of Natural Resources                                            
Final Finding and Determination to Sell Royalty Oil                           
to Mapco Alaska Petroleum, Inc. from the                                       
Department of Natural Resources                                                
The Alaska Royalty Oil and Gas Development                                    
Advisory Board, Resolution 98-1                                                
Fiscal note published today from Department of Natural Resources.              
Governors transmittal letter dated March 10:                                   
Dear President Miller:                                                         
I am transmitting a bill that provides for legislative approval of a           
royalty oil contract between the state and Mapco Alaska Petroleum,             
Inc. for the sale of Prudhoe Bay Unit royalty oil.  A copy of the              
resolution of the Alaska Royalty Oil and Gas Development Advisory              
Board, recommending approval of that contract in accordance with               

1998-03-12                     Senate Journal                      Page 2845
SB 342                                                                       
AS 38.06.040(a)(3) and 38.06.050(a) and providing the report                   
required by AS 38.06.070(c), is also being provided to the                     
Legislature with this bill.                                                    
Under the contract, the state will receive a fair value for the royalty        
oil, while promoting in-state processing and petroleum product                 
competition.  Among the economic benefits to Alaska's citizens are             
competitive consumer prices for petroleum products, such as gasoline,          
diesel and jet fuels, and employment of Alaskans at Mapco's North              
Pole refinery.                                                                 
Copies of the commissioner's preliminary finding and the draft                 
contract have been sent to the legislature and made available to the           
public for review.  The commissioner's final finding and the signed            
contract are attached.                                                         
I respect the Legislature's desire to have a direct voice in major             
disposals of royalty oil.  Therefore, although this and previous               
administrations have consistently taken the position the statutory             
requirement of legislative approval of royalty oil contracts is                
unconstitutional, as a matter of comity, I am introducing a bill               
approving and ratifying the contract.  The contract is consistent with         
provisions requiring approval by the Legislature before it takes effect.       
I urge your prompt consideration and passage of this bill.                     
						Tony Knowles