Legislature(2019 - 2020)DAVIS 106
03/20/2020 01:00 PM House RESOURCES
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| Audio | Topic |
|---|---|
| Start | |
| Confirmation Hearing(s):|| Big Game Commercial Services Board|| Alaska Oil and Gas Conservation Commission | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
| + | TELECONFERENCED | ||
| += | HB 280 | TELECONFERENCED | |
| + | TELECONFERENCED |
ALASKA STATE LEGISLATURE
HOUSE RESOURCES STANDING COMMITTEE
March 20, 2020
1:02 p.m.
MEMBERS PRESENT
Representative John Lincoln, Co-Chair (via teleconference)
Representative Geran Tarr, Co-Chair
Representative Grier Hopkins, Vice Chair
Representative Sara Hannan
Representative Chris Tuck
Representative Ivy Spohnholz
Representative Dave Talerico
Representative George Rauscher
MEMBERS ABSENT
Representative Sara Rasmussen
COMMITTEE CALENDAR
CONFIRMATION HEARING(S):
Big Game Commercial Services Board
Peter Buist - Fairbanks
- CONFIRMATION ADVANCED
Alaska Oil and Gas Conservation Commission
Jeremy Price - Anchorage
- CONFIRMATION ADVANCED
PREVIOUS COMMITTEE ACTION
No previous action to record
WITNESS REGISTER
PETER BUIST, Appointee
Big Game Commercial Services Board
Fairbanks, Alaska
POSITION STATEMENT: Testified as appointee to the Big Game
Commercial Services Board.
JEREMY PRICE, Appointee
Alaska Oil and Gas Conservation Commission
Anchorage, Alaska
POSITION STATEMENT: Testified as appointee to the Alaska Oil
and Gas Conservation Commission.
JESSIE CHMIELOWSKI, Petroleum Engineering Commissioner
Alaska Oil and Gas Conservation Commission
Anchorage, Alaska
POSITION STATEMENT: Testified in support during the
confirmation hearing of Jeremy Price, Appointee to the Alaska
Oil and Gas Conservation Commission.
DAN SEAMOUNT, Geologist Commissioner
Alaska Oil and Gas Conservation Commission
POSITION STATEMENT: Testified in support during the
confirmation hearing of Jeremy Price, Appointee to the Alaska
Oil and Gas Conservation Commission.
ACTION NARRATIVE
1:02:50 PM
CO-CHAIR GERAN TARR called the House Resources Standing
Committee meeting to order at 1:02 p.m. Representatives
Spohnholz, Talerico, Hannan, Hopkins, Lincoln (via
teleconference), and Tarr were present at the call to order.
Representatives Tuck and Rauscher arrived as the meeting was in
progress.
^CONFIRMATION HEARING(S):
^Big Game Commercial Services Board
^Alaska Oil and Gas Conservation Commission
CONFIRMATION HEARING(S):
Big Game Commercial Services Board
Alaska Oil and Gas Conservation Commission
1:04:43 PM
CO-CHAIR TARR announced the only order of business would be
confirmation hearings for the governor's appointees to the Big
Game Commercial Services Board and the Alaska Oil and Gas
Conservation Commission.
1:05:08 PM
PETER BUIST, Appointee, Big Game Commercial Services Board,
informed the committee that he was a fifty-year resident of
Fairbanks with degrees in biology and environmental
conservation. He retired from a thirty-year career with the
Alaska Department of Natural Resources (DNR) as a natural
resource officer, firefighter, forester, and master guide, he
added. He has served on the Alaska Board of Game, twice served
on the Big Game Commercial Services Board, and on the Guide
Licensing and Control Board.
1:06:16 PM
REPRESENTATIVE HANNAN asked Mr. Buist for whom he worked,
because it was stated on his application that he was a member of
the Alaska Interagency Incident Management Team.
MR. BUIST replied that as a retired Division of Forestry
employee, he sometimes worked seasonally as an emergency
firefighter for DNR. In response to a follow-up question, he
confirmed that he was a DNR employee with the State of Alaska
and not a federal employee with the Bureau of Land Management
(BLM).
1:07:54 PM
CO-CHAIR LINCOLN referred to the conflict with subsistence
animals and other big game animals, and the concept of a guide
concession program on state land. He asked Mr. Buist whether he
had any experience with or thoughts on these matters.
MR. BUIST replied that he has had experience at DNR and as a
guide. He said he held a federal concession in the Arctic
National Wildlife Refuge and supports the idea of a concession
system. He added it should not be administered by DNR, as he
understood how DNR viewed commercial use of state land.
1:09:46 PM
REPRESENTATIVE HANNAN asked what state agency would be
appropriate and mentioned the Alaska Department of Fish & Game
(ADF&G) and the Department of Commerce, Community & Economic
Development (DCCED), as concessions are usually described as a
land management allocation.
MR. BUIST replied that ADF&G would be most appropriate, and he
was almost certain ADF&G did not want it. In that case, he
said, DCCED would be the most appropriate administrator.
1:10:52 PM
CO-CHAIR TARR opened public testimony on the confirmation
hearing of Peter Buist to the Big Game Commercial Services
Board. After ascertaining that no one wished to testify, she
closed public testimony.
MR. BUIST expressed that he was glad to be of service.
1:12:40 PM
JEREMY PRICE, Appointee, Alaska Oil and Gas Conservation
Commission (AOGCC), related that he currently serves as chair to
the commission. He informed the committee he was born in
Fairbanks and worked for his family's electrical construction
business on the North Slope, installing lighting systems at
rural airports and running conduit at military installation
sites in the Interior. He moved to Washington, D.C., in hopes
of becoming a strong voice for Alaskans on Capitol Hill, and in
his nine years as a legislative assistant developed broad
experience in oil and gas issues. Mr. Price stated that he
prepared his boss for Congressional oversight hearings after the
Macondo Well Deepwater Horizon Blowout, helped the Cook Inlet
Regional Citizens' Advisory Council secure legislation that
required oil tankers transiting Prince William Sound to be
accompanied by escorts consisting of two tugboats, and helped
the Army Corps of Engineers and the Environmental Protection
Agency understand that a bridge was better for the environment
than a buried pipeline. He has helped represent all segments of
the oil and gas industry, he said. He has degrees in business
and in government, the latter from Johns Hopkins University,
where his thesis was on conventional and renewable energy
subsidies.
1:15:08 PM
MR. PRICE returned to Alaska in 2014 with his family to open the
state chapter of Americans for Prosperity, an organization that
advocates for removing barriers to opportunity. In his role he
frequently provided public testimony. He was hired as deputy
chief of staff after the election of Governor Mike Dunleavy, he
related. The mission of AOGCC is to protect underground
freshwater sources, he said, and ensure greater ultimate
recovery after unsafe drilling practices. He related facts
about underwater contamination including how AOGCC, with the
help of the EPA, has been able to successfully administer the
underground injection control program for more than 30 years.
He related more accomplishments of AOGCC, especially in terms of
Alaska's robust requirements for bonding wells which are the
highest in the U.S. Mr. Price said that he desired to serve
Alaskans and responsibly develop resources for the benefit of
the people.
1:17:48 PM
REPRESENTATIVE SPOHNHOLZ asked Mr. Price how he was qualified
for his role at AOGCC.
MR. PRICE replied that during his time in Washington, D.C., he
had been in a policy aide role which included drafting
legislation, reviewing regulations, and providing amendments to
bills. He related that he has a great deal of experience with
law, admitted that engineering was not his strength, and
expressed gratitude for the support he has received from
accomplished commissioners.
REPRESENTATIVE SPOHNHOLZ asked why, given the fact the price of
oil had dropped again, Mr. Price thought it would be a good idea
to change any regulations or provide exemptions from bonding
requirements to companies.
MR. PRICE replied that AOGCC had held hearings but has not
decided on adjustments and did not expect to change from
regulations that were finalized and put in place last year.
REPRESENTATIVE SPOHNHOLZ asked whether Mr. Price would
recommend, as an individual commissioner separate from AOGCC,
exemptions from bonding requirements for companies.
1:21:04 PM
MR. PRICE replied he was unable to say at this time and would
have to wait until orders were issued.
REPRESENTATIVE SPOHNHOLZ asked whether the current low-price
environment gave Mr. Price any pause regarding the financial
sustainability of some of the smaller companies in Alaska.
MR. PRICE replied that economic conditions were not part of the
criteria looked at by AOGCC. He added that companies were able
to argue they could not make the bond, but it was not the role
of AOGCC to make those assumptions or calculations.
REPRESENTATIVE SPOHNHOLZ repeated that her question was whether
the current low-price environment put some companies at risk for
financial stability and whether bonding was a backstop against
that risk.
MR. PRICE responded that said he would not be surprised if some
companies had to file for bankruptcy over the low prices, and he
agreed that bonding amounts protected public interest of
Alaskans.
1:24:07 PM
REPRESENTATIVE TUCK asked what Mr. Price's role with AOGCC would
be if it were not to look at economic factors.
MR. PRICE answered that his role would be to ensure both
correlative rights and drinking water sources were protected.
He added that AOGCC wanted to ensure zero waste and safety in
development and production.
REPRESENTATIVE TUCK asked whether that included maximizing
benefits for Alaskans.
MR. PRICE replied that it did include "enhancing total recovery"
within AOGCC regulations. He gave, as an example, a way of
ensuring operators were not wasting oil or gas.
REPRESENTATIVE TUCK asked which months Mr. Price had worked for
the American Petroleum Institute (API).
MR. PRICE replied that he was at API from 2013 to 2014 but he
would have to check which months.
REPRESENTATIVE TUCK noted that January 2013 to December 2014
would be more impressive than December 2013 to January 2014. He
asked Mr. Price the title of his master's thesis and to what
conclusions he had come.
MR. PRICE replied that he would report back to the committee
with his thesis title, and that in it he had advocated against
subsidies for the fossil fuel industry.
REPRESENTATIVE TUCK observed that it was Mr. Price's master's
thesis, which he opined was "kind of a big deal."
MR. PRICE replied that while his thesis was a 100-page document,
he had written it 10 years ago. He added that he would provide
a copy to the committee.
1:27:43 PM
REPRESENTATIVE HANNAN asked whether Mr. Price was familiar with
per- and polyfluoroalkyl substances (PFAS) contamination of
drinking water and the petroleum industry's allowance for
petroleum developers to use flame retardant chemicals for PFAS.
MR. PRICE said he was familiar with perfluorooctanesulfonic acid
(PFOS) and perfluorooctanoic acid (PFOA) as they had occurred in
rural airports throughout the state and in military
installations. He said he had not come across them on the North
Slope or Cook Inlet.
REPRESENTATIVE HANNAN said her understanding was that PFAS was
the primary component for fire response on the North Slope, and
she would like to know what AOGCC was doing to get away from
PFOS and PFOA flame retardants, because they do not decompose
and thus permanently damaged water's drinkability.
MR. PRICE said he would be happy to look more into the issue.
1:30:19 PM
REPRESENTATIVE HANNAN asked what Mr. Price had been engaged in
at AOGCC in terms of protecting drinking water.
MR. PRICE replied every time an operator applied for a permit to
drill or a request to enter or reenter wells, AOGCC ensured
proper plans and procedures from the operator had been obtained.
Steps were taken to ensure multiple barriers between
hydrocarbons and underground water drinking water sources, he
said. Formation integrity tests were required, he added. There
had been no documentation that drinking water had been
contaminated, Mr. Price said.
1:32:02 PM
CO-CHAIR LINCOLN asked whether Mr. Price was familiar with the
concept of prior liability on decommissioning, removal, and
restoration (DR&R) for wells and whether he had any thoughts to
share on the topic.
MR. PRICE answered that he had no opinion on that specific draft
legislation. As he understood it, he stated, the concept was to
hold prior owners of wells liable in certain circumstances; he
was unsure whether it was something needed in Alaska.
California and Kansas had the legislation in place, he added,
also stating that he was still learning about the issue.
1:34:37 PM
CO-CHAIR LINCOLN asked whether Mr. Price knew what motivated
California and Kansas to implement the legislation.
MR. PRICE replied he did not have the details or exact history.
CO-CHAIR LINCOLN asked whether there had been an incident in
Alaska in which an operator had abandoned a well without taking
care of it and the bonds had not been enough to cover the cost.
MR. PRICE replied there had been an incident in Cook Inlet which
became the impetus for prioritizing the raising of bonding
amounts. The landowner had had to come up with the money to
properly plug and abandon the wells, Mr. Price related, and
AOGCC had acted before further liabilities occurred. This was
expected to occur more frequently as fields matured and larger
operators sold assets to smaller independents. He added he
would like to see AOGCC move forward with at least six more
requests as well as have conversations with DNR on the matter.
1:37:33 PM
REPRESENTATIVE TUCK asked Mr. Price what questions he needed
answered before he came up with an opinion regarding DR&R.
MR. PRICE replied specific amounts within DR&R agreements would
be helpful to AOGCC.
REPRESENTATIVE TUCK asked if Mr. Price had any questions about
DR&R.
MR. PRICE replied there had been other mechanisms states used to
pay for well abandonment. In Texas there were multiple revenue
streams used for plugging wells. When AOGCC levied a fine
against an operator, the money from the fine went to the general
fund, he stated. There were many orphan wells in other states
which did not have the legislation in place, Mr. Price stated,
and he would like to "take a page out of their playbooks."
1:40:38 PM
REPRESENTATIVE TUCK said AOGCC brought the issue of legacy wells
to the committee's attention, and he would think it would be
AOGCC's role to look at what the DR&R was. He stated that it
would be nice to know how big "the IOU" was.
MR. PRICE replied that AOGCC was mindful of the issue and sought
to work with DNR and BLM. He said AOGCC was interested in BLM
working with its own experts, but the problem was that BLM,
though receptive to working with AOGCC, has made mistakes in
plugging wells, and the work had had to be redone by AOGCC, he
related.
REPRESENTATIVE TUCK asked whether Mr. Price referred only to BLM
or to industry in general.
MR. PRICE replied that when wells were on state land, AOGCC
could ensure they met plugging and abandonment criteria, but
there was not as much control when this occurred on federal
land.
1:43:37 PM
REPRESENTATIVE HANNAN asked Mr. Price whether there was a
conflict between his work "removing barriers to opportunity" in
his role at Americans for Prosperity and his role overseeing
complex industry at AOGCC and whether he could explain how his
philosophy regarding the government's oversight obligations may
have changed when taking on the latter.
MR. PRICE admitted they were two very different roles. He
clarified that when he referenced barriers to opportunity at
Americans for Prosperity, he never advocated for any rules that
negatively impacted health and safety. In the new role at
AOGCC, his primary responsibility was to ensure work was being
done in a safe and environmentally conscious way in Alaska, so
he did not feel there was any contradiction.
1:45:54 PM
REPRESENTATIVE RAUSCHER asked Mr. Price to explain why he chose
to work for AOGCC and what he saw as his purpose looking
forward.
MR. PRICE responded that he was interested in the role because
he loved serving Alaskans both in Washington, D.C., and in
Alaska, and he has always enjoyed working on oil and gas issues.
He added he has personally ushered AOGCC into the age of
conducting business electronically and has thus already improved
efficiency.
1:49:52 PM
CO-CHAIR TARR asked Mr. Price what would be done in terms of
appropriate measures taken regarding the changing climate.
MR. PRICE replied that climate was a priority. He said last
year British Petroleum (BP) plugged the worst of wells causing
permafrost subsidence and thus compromising integrity when it
came to well casings. Fourteen wells were flagged to be plugged
by AOGCC, and there was another tier being looked at; wells back
to the 1970s showing issues are a standing issue with AOGCC, he
stated. Elevation changes are being monitored by all operators;
BP and Conoco Phillips are among those operators experiencing
this issue.
CO-CHAIR TARR asked whether AOGCC was collaborating with
university researchers or anyone else who could use the data,
adding that due to budget cuts a lot of research has stopped.
MR. PRICE answered he was unaware of research with the
University of Alaska (UA) but could investigate it and get back
to the committee.
CO-CHAIR TARR said even beyond research, which may fall outside
AOGCC's jurisdiction, there should be more data sharing, and a
collaboration with the operators may be a good place to start.
MR. PRICE said AOGCC wanted to ensure all operators and elected
officials were aware of what was occurring, and he was committed
to sharing as much as he could.
1:55:36 PM
CO-CHAIR TARR opened public testimony on the confirmation
hearing of Jeremy Price to the Alaska Oil and Gas Conservation
Commission.
1:55:52 PM
JESSIE CHMIELOWSKI, Petroleum Engineering Commissioner, Alaska
Oil and Gas Conservation Commission, said most of the work done
at AOGCC was highly technical in nature, and Mr. Price was
resourceful and engaged in learning. Ms. Chmielowski added that
Mr. Price was well-connected in Alaska, which helped AOGCC
achieve its goals. She related that in 2019, AOGCC updated its
bonding requirements, and Mr. Price had been fair, impartial,
and supportive throughout the process.
1:58:55 PM
DAN SEAMOUNT, Geologist Commissioner, said Mr. Price is
hardworking, energetic, and highly qualified. Mr. Seamount
echoed Ms. Chmielowski's assessment of Mr. Price's fairness and
impartiality and stated that Mr. Price had the public interest
of Alaskans in the forefront of his mind when it came to oil and
gas. He added Mr. Price was easy to work with in that he was
willing to change his mind on an issue. Mr. Seamount reiterated
Mr. Price's qualifications.
2:02:43 PM
MR. SEAMOUNT informed the committee Mr. Price left the U.S.
Senate in 2013 to work for API, on which AOGCC relies and from
which AOGCC has adopted standards as regulations. Mr. Seamount
repeated his recommendation for Mr. Price's appointment.
2:03:29 PM
CO-CHAIR TARR, after ascertaining no one further wished to
testify, closed public testimony.
2:05:00 PM
REPRESENTATIVE HANNAN read a statement of intent as follows:
The resources committee has reviewed the
qualifications of the governor's appointees, Jeremy
Price to the Alaska Oil and Gas Conservation
Commission and Peter Buist to the Big Game Commercial
Services Board and recommends that the names be
forwarded to a joint session of the legislature for
consideration. This does not reflect intent by any of
the members to vote for or against these individuals
during any further sessions for the purpose of this
confirmation.
[The confirmations of Peter Buist to the Big Game Commercial
Services Board and Jeremy Price to the Alaska Oil and Gas
Conservation Commission were considered advanced.]
2:06:45 PM
ADJOURNMENT
There being no further business before the committee, the House
Resources Standing Committee meeting was adjourned at 2:07 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| Jeremy Price Resume_Redacted.pdf |
HRES 3/20/2020 1:00:00 PM |
Jeremy Price |
| Big Game Commercial Services Peter Buist Resume.pdf |
HRES 3/20/2020 1:00:00 PM |
Peter Buist |
| Jeremy Price - letter of support AOGCC - 1-28-2020.PDF |
HRES 3/20/2020 1:00:00 PM |
Jeremy Price |
| Peter Buist Bio for House Resources Confirmation Hearing 3.19.20.pdf |
HRES 3/20/2020 1:00:00 PM |
Peter Buist |
| Jim Udelhoven ltr of support - Price 3.20.20.pdf |
HRES 3/20/2020 1:00:00 PM |
Confirmation - Jeremy Price |
| Murkowski and Young ltr of support - Price 3.20.20.pdf |
HRES 3/20/2020 1:00:00 PM |
Confirmation - Jeremy Price |
| PWSRCAC ltr of support - Price 3.20.20.pdf |
HRES 3/20/2020 1:00:00 PM |
Confirmation - Jeremy Price |