02/05/2024 01:00 PM House RESOURCES

                 HB 257-COOK INLET SEISMIC DATA                                                                             
                                                                                                                                
2:05:35 PM                                                                                                                    
                                                                                                                                
CHAIR MCKAY announced  that the final order of  business would be                                                               
HOUSE BILL NO.  257, "An Act requiring the  Department of Natural                                                               
Resources to  make Cook  Inlet seismic  survey data  available to                                                               
certain persons; and providing for an effective date."                                                                          
                                                                                                                                
CHAIR MCKAY, as  prime sponsor, presented HB 257.   He shared the                                                               
sponsor statement [included in the  committee packet], which read                                                               
as follows [original punctuation provided]:                                                                                     
                                                                                                                                
     As Alaska  State Legislators, we  are all  committed to                                                                    
     unlocking  the vast  potential of  Cook  Inlet for  gas                                                                    
     exploration and drilling. One way  we can do this is by                                                                    
     attempting  to broaden  access  to state-owned  seismic                                                                    
     survey  data. This  legislation  aims  to enhance  data                                                                    
     access, allowing a wider range  of experts and industry                                                                    
     players to  explore the geological intricacies  of Cook                                                                    
     Inlet. By making seismic data  more accessible, we hope                                                                    
     to stimulate  interest and investment from  new players                                                                    
     in the  energy sector.  Our goal  is to  enhance energy                                                                    
     security, support economic  development, and ensure the                                                                    
     sustainable management  of Alaska's  natural resources.                                                                    
     This bill  represents a  pivotal step  toward realizing                                                                    
     the  untapped  potential  of  Cook  Inlet,  encouraging                                                                    
     innovation, and fostering a competitive energy market.                                                                     
                                                                                                                                
2:07:49 PM                                                                                                                    
                                                                                                                                
TREVOR  JEPSEN, Staff,  Representative  Tom  McKay, Alaska  State                                                               
Legislature, on  behalf of  Representative McKay,  prime sponsor,                                                               
gave a PowerPoint  presentation on HB 257 [hard  copy included in                                                               
the committee packet].  He  provided an overview of seismic data,                                                               
which  is  a  tool used  by  the  oil  and  gas industry  to  map                                                               
geological  structures with  sound waves.   Typically,  procuring                                                               
this specialized data  costs anywhere from a  few million dollars                                                               
to tens  or hundreds  of millions.   Despite  state-owned seismic                                                               
data being offered at a fraction  of the cost for acquisition, it                                                               
still serves as a barrier for  exploration.  HB 257 would require                                                               
the Department  of Natural Resources  (DNR) to  distribute state-                                                               
owned seismic data  to qualified persons at no charge.   The goal                                                               
of  the  legislation  is  to attract  new  players  and  industry                                                               
professionals to Cook Inlet where  gas production is predicted to                                                               
decrease  in  the  near  future costing  the  state  hundreds  of                                                               
millions   in   infrastructure   investment  and   resulting   in                                                               
significantly higher energy prices for rate payers.                                                                             
                                                                                                                                
2:14:27 PM                                                                                                                    
                                                                                                                                
CHAIR MCKAY explained  that the bill is limited to  Cook Inlet to                                                               
spur exploration and development in the area.                                                                                   
                                                                                                                                
2:14:58 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE MCCABE sought  to confirm that the  data is stored                                                               
at the Geological Materials Center (GMC).                                                                                       
                                                                                                                                
MR. JEPSEN answered yes.                                                                                                        
                                                                                                                                
2:15:20 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  SADDLER requested  the citation  for the  seismic                                                               
tax credits.                                                                                                                    
                                                                                                                                
MR. JEPSEN  responded AS 43.55.025(a)(2) and  AS 43.55.025(f)(2).                                                               
He concluded the  presentation with a report on  seismic sales in                                                               
Cook Inlet and a brief sectional analysis.                                                                                      
                                                                                                                                
2:19:28 PM                                                                                                                    
                                                                                                                                
JOHN CROWTHER,  Deputy Commissioner, Office of  the Commissioner,                                                               
Department of Natural  Resources (DNR), said the  DNR fiscal note                                                               
captures existing  funds from data  sales that were  covering the                                                               
operational costs  of the program as  designated program receipt.                                                               
The fiscal  note also reflects an  anticipated increased interest                                                               
in the  data sets,  which would  result in  increased operational                                                               
costs.                                                                                                                          
                                                                                                                                
2:21:37 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE SADDLER  sought clarification  of page 2,  line 17                                                               
of the bill.                                                                                                                    
                                                                                                                                
MR. CROWTHER  said there  are different  land ownership  types in                                                               
Cook Inlet.   Historically, the owner of proprietary  data may be                                                               
an exploration company.                                                                                                         
                                                                                                                                
REPRESENTATIVE  SADDLER  asked for  the  percentage  of the  Cook                                                               
Inlet basin that's privately owned.                                                                                             
                                                                                                                                
MR. CROWTHER said he did  not have a precise number; nonetheless,                                                               
two  land  ownership patterns  are  relevant  on a  macro  scale:                                                               
Alaska Native  Corporations pursuant to the  Alaska Native Claims                                                               
Settlement Act  (ANCSA) and small  private land  ownership types.                                                               
He stated  that Cook  Inlet has the  most complex  land ownership                                                               
pattern.                                                                                                                        
                                                                                                                                
2:24:26 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  SADDLER  questioned   the  likelihood  that  this                                                               
proposal would be prevented  under the confidentiality provisions                                                               
of subparagraph (A) on page 2, lines 15-17.                                                                                     
                                                                                                                                
2:24:57 PM                                                                                                                    
                                                                                                                                
MR. CROWTHER clarified  that current law obligates  DNR to modify                                                               
the  datasets   by  extracting  restricted  data   before  public                                                               
disclosure.   He added that  all the  data available for  sale or                                                               
publication has already gone through that process.                                                                              
                                                                                                                                
2:25:48 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  MEARS shared  her understanding  that the  larger                                                               
concern for development is the timeliness of the data release.                                                                  
                                                                                                                                
MR.  CROWTHER  recalled  that legislators  were  concerned  about                                                               
promptly  publishing  the data  as  soon  as the  confidentiality                                                               
period  expire.   He  said DNR  has been  working  to revise  its                                                               
processes and accelerate the publication timeframes.                                                                            
                                                                                                                                
REPRESENTATIVE  MEARS asked  whether  the bill  would affect  the                                                               
timeliness of the data release.                                                                                                 
                                                                                                                                
MR. CROWTHER  said DNR does  not anticipate a delay  in timeframe                                                               
if the bill were to pass.   He noted that all of this information                                                               
is available on  DNR's website and all of the  seismic tax credit                                                               
data that's eligible for release is available for public access.                                                                
                                                                                                                                
2:30:06 PM                                                                                                                    
                                                                                                                                
CHAIR MCKAY announced that HB 257 was held over.