Legislature(2003 - 2004)
02/20/2003 01:45 PM House FIN
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE BILL NO. 101
An Act making a special appropriation for a grant to
Arctic Power to promote the opening of the Arctic
National Wildlife Refuge for oil and gas exploration
and development; and providing for an effective date.
TOM WRIGHT, HOUSE FINANCE STAFF, REPRESENTATIVE JOHN HARRIS,
stated that HB 101 would appropriate $3 million dollars in
general funds to Arctic Power to use in its campaign to
secure necessary support in the U.S. Senate to pass
legislation opening Arctic National Wildlife Refuge (ANWR)
for oil exploration. The Budget Reconciliation bill will be
considered early in the Congressional session. He commented
that it is important that Arctic Power be active in its
promotion of opening ANWR throughout the early part of 2003.
Mr. Wright noted that HB 101 would also appropriate $100,000
in general fund dollars to the native village of Kaktovik
for their community outreach effort to gain support for the
opening of ANWR from Congressional members in Washington,
D.C.
He added that Alaska's Congressional delegation believes
that they may have the support to pass ANWR language this
year. The educational efforts provided by Arctic Power
could very well tip the scales in Alaska's favor whenever
that vote reaches the Senate floor. With the long-term
decrease in State revenue from existing fields, it is
imperative that Alaska develops additional new fields in the
future. ANWR is an important part of our fiscal future.
Representative Foster inquired how many years had the
Legislature been attempting to achieve the opening of ANWR.
Mr. Wright responded that it has been nine to ten years in
the making.
MIKE NAVARRE, (TESTIFIED VIA TELECONFERENCE), ARCTIC POWER
BOARD, REPRESENTING SELF, KENAI, encouraged the Committee to
support the proposed legislation and ongoing funding for
Arctic Power. He noted that he had lobbied for opening the
fields of ANWR for many years and that area has the highest
discovery potential in North America. He claimed that
opening ANWR would provide the State of Alaska the
opportunity, which will pay investments and great returns.
SALLY ANN CAREY, (TESTIFIED VIA TELECONFERENCE), MEMBER OF
ARCTIC POWER, HEALTH, SAFETY AND ENVIRONMENTAL TRAINING
CONSULTANTS, ANCHORAGE, discussed that $3 million dollars
was a small investment for the return that it would bring
into Alaska. Opening ANWR would extend Alaskan careers,
production, and sales of local product, services and funding
for our State. She encouraged that funding Arctic Power
would be a prudent decision.
MARY SHIELDS, (TESTIFIED VIA TELECONFERENCE), GENERAL
MANAGER, NORTHWEST TECHNICAL SERVICES, ANCHORAGE, spoke in
support of the proposed legislation. She emphasized that
the future is now and that it is time to open the Arctic.
She encouraged the Legislature's support of passage of the
st
bill with an effective date of January 1.
BRAD SNOW, (TESTIFIED VIA TELECONFERENCE), SELF-TOUR GUIDE,
FAIRBANKS, testified in opposition to HB 101. He noted that
he opposed providing funds to an organization that directly
threatens his livelihood. He claimed that through support
of the proposed legislation, the State would undermine the
infrastructure of the tourism industry.
DEB MOORE, (TESTIFIED VIA TELECONFERENCE), ARCTIC
COORDINATOR, NORTHERN ALASKA ENVIRONMENTAL CENTER,
FAIRBANKS, spoke in opposition to HB 101. She expressed
concern for the non-representation of environmental groups
during the process. She stressed that Arctic Power is a
special interest group whose sole purpose is to lobby the
opening of ANWR. She claimed that it is inappropriate to be
using State money for a special interest group considering
that 1/3 of the State's population opposes the drilling.
Ms. Moore criticized supporting private industry with State
resources, especially in times of financial constraints.
State money should be spent for things that are in the
interest of all Alaskans and serve the public at large and
not just the oil industry and their allies. She proposed
that industry fund the opening of ANWR. Ms. Moore urged the
Committee to oppose HB 101.
LUCI BEACH, (TESTIFIED VIA TELECONFERENCE), GWITCH STEERING
COMMITTEE, FAIRBANKS, testified in opposition to the bill.
She discussed the sacred significance of these lands to her
culture and her people. Ms. Beach voiced concern that while
the State budget was being heavily cut, the Legislature was
considering funding a private endeavor. She stressed the
closure of schools in rural areas, as well as agency cuts.
Ms. Beach stressed that the oil companies should bear the
financial burden of such an endeavor.
GINNY WOOD, (TESTIFIED VIA TELECONFERENCE), FAIRBANKS,
testified in opposition the bill. She noted historical
examples of economic gains, which claimed to develop Artic
resources. She maintained that the present plan is not
accountable and that the economic feasibility is dubious.
She expressed concern over what she termed a great deal of
misinformation regarding the amount of oil available in
Arctic area. She urged that the Committee not pass the bill
from Committee.
JIM SYKES, (TESTIFIED VIA TELECONFERENCE), FOUNDER, OIL
WATCH-ALASKA, MAT-SU, urged that the Committee veto HB 101.
The millions of dollars already given to Arctic Power have
produced nothing to date. He urged that there be an audit
on the use of State funds.
Mr. Sykes noted that British Petroleum (BP) has pulled out
of Arctic Power. He claimed that Arctic Refuge oil would
mean a cut of 40% in royalties to the State. The State
'must' focus on the development of State lands as a
priority. The State cannot afford to throw "good money
after bad", when the State needs public education and public
safety. He mentioned the "windfall profit tax" and how much
that tax would have generated for the State had it been in
place. He reiterated that Arctic Power should be audited.
KIMBERLY DUKE, EXECUTIVE DIRECTOR, ARCTIC POWER, ANCHORAGE,
clarified that Arctic Power has been working with the
Congressional delegation, the Governor and the Legislature
for opening ANWR. She stressed that there have been
considerable successes along the way and that with the
support of the President, circumstances have never been
better. Ms. Duke claimed that investing in Arctic Power has
always been an investment of Alaska's future. Oil and gas
development is the 'bread and butter' of Alaska's State
budget and funds 80% of the overall budget. She stressed
that it would be a wise investment for Alaska.
The U.S. Geological Survey has placed a conservative
estimate of 10 billion barrels of oil in the ANWR area. She
stated that would be equal to the amount recovered from the
Prudoe Bay field. That level of production would double the
level of production in the pipeline right now bringing it
back to capacity of 2 million barrels per day.
Ms. Duke reminded members that the land is federal land and
that the State will receive 50% in royalties. In current
legislation, that would amount to $1.5 billion dollars in
royalties for the State of Alaska.
She noted that U.S. Senator Stevens has indicated that when
the refuge was expanded in 1980, his 'compromise deal' was
to keep the coastal plain area open for oil and gas
exploration. The Department of Interior approved that and
recommended exploration in 1987. Opening ANWR will provide
jobs and increase domestic production.
Ms. Duke stressed that Arctic Power has been working on the
issue for 10 years. She noted that by the end of 2002,
there were 20 votes through Congress through various
committees and on the floor. President Clinton vetoed the
legislation in 1995. In 2001, the House passed legislation
and it was vetoed and did not move past that body until
2002. She noted that political considerations have changed
dramatically since that time.
Ms. Duke commented on the 'open book' policy of grant
funding done by Arctic Power, noting that their money is
audited.
Representative Stoltze asked if during the process if there
had been any efforts to preclude certain areas from
drilling.
Ms. Duke responded that there had been a number of attempts
to preclude certain areas and there have been a number of
bills regularly filed to open areas. The coastal plain area
is outside the designated wilderness of the Arctic Refuge.
Out of 19 million acres, there are 8 million acres of
designated refuge, which would include the Brooks Range
where a lot of the tourist activities take place.
Representative Stoltze asked for a composition of groups
involved with Arctic Power.
Ms. Duke advised that Arctic Power is a non-profit
organization, '501 C6', and is operated by a Board of
Directors. Arctic Power has been in existence for ten years
and it is a "grass roots organization" representing the
State of Alaska in Congress in this 'battle'. She claimed
that Arctic Power has approximately 75% support in the
State.
BARBARA HUF TUCKNESS, DIRECTOR OF LEGISLATIVE & GOVERNMENTAL
AFFAIRS, LOCAL 959, JUNEAU, spoke on record in support of HB
101. She noted that Arctic Power is an excellent resource
for educating the Alaskan people. Ms. Huff Tuckness noted
that many members in the Union are or have been employed on
the North Slope.
TAPE HFC 03 - 23, Side A
Ms. Huff Tuckness identified job opportunities that the
State can look forward to with development. She urged that
the State look at what can proactively be done, as those
resources are needed for the long term. Ms. Huff Tuckness
strongly recommended that the members support and move from
Committee, HB 101.
Representative Stoltze commented that past Legislature's had
gone on record supporting the legislation encouraging local
hire and fair share. He asked if oil companies would have
the same commitment for lobbying for concerns for the State
of Alaska.
Ms. Huff Tuckness believed that they would.
Representative Stoltze reiterated, asking if the oil
companies would be attentive to local hire and those other
provisions. He pointed out that the Legislature does not
have the same interests as the oil companies and voiced
concern that they take care of the local hire issues.
Ms. Huff Tuckness explained that from a Legislative
perspective, there are many issues of concern. The
Legislature must move forward to guarantee that all the
issues are identified.
MATT DAVIDSON, ALASKA CONSERVATION ALLIANCE (ACA) ADVOCATE
FOR THE ALASKA CONSERVATION VOTERS, JUNEAU, requested that
the bill be reconsidered. He noted that the Alaska
Conservation Alliance (ACA) and Alaska Conservation Voters
are sister nonprofit organizations dedicated to protecting
Alaska's environment through public education and advocacy.
The 44 member organizations and businesses represent over
35,000 registered Alaskan voters. As many Alaskans, the
members want to be assured that the State's limited general
funds are being put to the best uses. The State has given
Arctic Power $7.5 million dollars over the past 10 years.
Witnessing State agencies and other entities being cut back.
Mr. Davidson interjected that before appropriating $3.1
million dollars to Arctic Power, legislators should seek
answers to these questions:
• Ask is this a responsible way to handle the
budget gap with the limited funding for basic
protection of fish habitat and clean water. He
asked why should the State dump millions of
dollars into the Arctic Power black hole.
• Ask where has the money gone. In the last two
years, Arctic Power has received almost $5
million dollars from the State of Alaska with
nothing to show. The reports regarding Arctic
Power indicate that they 'bankroll high-priced'
lobby firms in Washington D.C.
• Ask why should Alaskans pay for an effort that
benefits multinational oil companies.
• Ask how does the Legislature plan to hold Arctic
Power accountable for those general funds
appropriated.
Mr. Davidson concluded that the money under consideration
for Arctic Power's use is funding that would not be
available to address statewide needs. Essentially, all
Alaskans are being asked to help finance the oil industry's
lobbying efforts and in return, it is reasonable for full,
public disclosure of how they spend that money. He
encouraged members of the House Finance Committee to ask for
that information before authorizing any additional funds.
Co-Chair Williams stated that HB 101 would be HELD in
Committee for further consideration.
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