Legislature(2021 - 2022)BARNES 124

03/04/2022 01:00 PM House RESOURCES

Note: the audio and video recordings are distinct records and are obtained from different sources. As such there may be key differences between the two. The audio recordings are captured by our records offices as the official record of the meeting and will have more accurate timestamps. Use the icons to switch between them.

Download Mp3. <- Right click and save file as

Audio Topic
01:03:37 PM Start
01:04:19 PM Presentation: Alaska's Competitive Position by Gaffney Cline
02:51:29 PM HB347
03:18:47 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ Presentation: Alaska's Competitive Position by TELECONFERENCED
Gaffney Cline
+= HCR 4 URGING EST. OF OFFICE OF OUTDOOR EQUITY TELECONFERENCED
<Bill Hearing Canceled>
+ Bills Previously Heard/Scheduled TELECONFERENCED
*+ HB 347 CONFIDENTIALITY OF ANIMAL RECORDS TELECONFERENCED
Heard & Held
                    ALASKA STATE LEGISLATURE                                                                                  
               HOUSE RESOURCES STANDING COMMITTEE                                                                             
                         March 4, 2022                                                                                          
                           1:03 p.m.                                                                                            
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Josiah Patkotak, Chair                                                                                           
Representative Grier Hopkins, Vice Chair                                                                                        
Representative Calvin Schrage                                                                                                   
Representative Sara Hannan                                                                                                      
Representative George Rauscher                                                                                                  
Representative Mike Cronk                                                                                                       
Representative Ronald Gillham                                                                                                   
Representative Tom McKay                                                                                                        
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Representative Zack Fields                                                                                                      
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
PRESENTATION: ALASKA'S COMPETITIVE POSITION BY GAFFNEY CLINE                                                                    
                                                                                                                                
     - HEARD                                                                                                                    
                                                                                                                                
HOUSE BILL NO. 347                                                                                                              
"An Act relating to the confidentiality of certain state records                                                                
relating to animals; and providing for an effective date."                                                                      
                                                                                                                                
     - HEARD & HELD                                                                                                             
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
BILL: HB 347                                                                                                                  
SHORT TITLE: CONFIDENTIALITY OF ANIMAL RECORDS                                                                                  
SPONSOR(s): REPRESENTATIVE(s) RAUSCHER                                                                                          
                                                                                                                                
02/22/22       (H)       READ THE FIRST TIME - REFERRALS                                                                        
02/22/22       (H)       RES                                                                                                    
03/02/22       (H)       RES AT 1:00 PM BARNES 124                                                                              
03/02/22       (H)       -- MEETING CANCELED --                                                                                 
03/04/22       (H)       RES AT 1:00 PM BARNES 124                                                                              
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
MIKE CLINE, Strategy Advisor/Legal Counsel                                                                                      
Gaffney, Cline & Associates                                                                                                     
Houston, Texas                                                                                                                  
POSITION  STATEMENT:    Co-provided  a  PowerPoint  presentation,                                                             
titled "Alaska's Competitive Position."                                                                                         
                                                                                                                                
NICK FULFORD, Senior Director                                                                                                   
Gas/LNG-Carbon Management-Energy Transition-Americas                                                                            
Gaffney, Cline & Associates                                                                                                     
Houston, Texas                                                                                                                  
POSITION  STATEMENT:    Co-provided  a  PowerPoint  presentation,                                                             
titled "Alaska's Competitive Position."                                                                                         
                                                                                                                                
RYAN MCKEE, Staff                                                                                                               
Representative George Rauscher                                                                                                  
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION  STATEMENT:   Presented  the sectional  analysis for  HB
347,  Version  I, on  behalf  of  Representative Rauscher,  prime                                                               
sponsor.                                                                                                                        
                                                                                                                                
AMY SEITZ, Executive Director                                                                                                   
Alaska Farm Bureau                                                                                                              
Soldotna, Alaska                                                                                                                
POSITION STATEMENT:  Provided invited  testimony in support of HB
347.                                                                                                                            
                                                                                                                                
CHRISTINA CARPENTER, Director                                                                                                   
Division of Environmental Health                                                                                                
Department of Environmental Conservation                                                                                        
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Provided invited  testimony in support of HB
347.                                                                                                                            
MIKE CLINE, Strategy Advisor/Legal Counsel                                                                                      
Gaffney, Cline & Associates                                                                                                     
Houston, Texas                                                                                                                  
POSITION  STATEMENT:    Co-provided  a  PowerPoint  presentation,                                                             
titled "Alaska's Competitive Position."                                                                                         
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
1:03:37 PM                                                                                                                    
                                                                                                                                
CHAIR  JOSIAH  PATKOTAK  called   the  House  Resources  Standing                                                             
Committee meeting to  order at 1:03 p.m.   Representatives McKay,                                                               
Cronk,  Hopkins, Rauscher,  Hannan,  Gillham,  and Patkotak  were                                                               
present at the call to  order.  Representative Schrage arrived as                                                               
the meeting was in progress.                                                                                                    
                                                                                                                                
^Presentation: Alaska's Competitive Position by Gaffney Cline                                                                   
  Presentation: Alaska's Competitive Position by Gaffney Cline                                                              
                                                                                                                                
1:04:19 PM                                                                                                                    
                                                                                                                                
CHAIR PATKOTAK announced  that the first order  of business would                                                               
be  a presentation  on Alaska's  Competitive Position  by Gaffney                                                               
Cline Consultants.                                                                                                              
                                                                                                                                
1:04:48 PM                                                                                                                    
                                                                                                                                
MIKE  CLINE, Strategy  Advisor/Legal  Counsel,  Gaffney, Cline  &                                                               
Associates,  co-provided  a  PowerPoint presentation  [hard  copy                                                               
included in  the committee packet], titled  "Alaska's Competitive                                                               
Position."    He presented  slide  3,  "Volatility, Disruption  &                                                               
Supply  in  the  Oil  &  Gas Industry,"  which  read  as  follows                                                               
[original punctuation provided]:                                                                                                
                                                                                                                                
     • The  oil & gas  industry has been battered  by deeply                                                                    
     disruptive   events   in   recent  years   leading   to                                                                    
     volatility.                                                                                                                
            Oil price collapse of 2014-2016 and Covid-19.                                                                       
              Deep   cost   cutting,  project   delays   and                                                                    
          cancellations   will   have   long   term   supply                                                                    
          implications.                                                                                                         
            The  impact of  energy transition on  the energy                                                                    
          mix and  related shift in the  long-term prospects                                                                    
          of the industry.                                                                                                      
            Most  recently dramatic  price increases  as the                                                                    
          global  economy emerges  from  Covid-19 against  a                                                                    
          backdrop  of  geopolitical   concerns  in  Eastern                                                                    
          Europe and the Middle East.                                                                                           
                                                                                                                                
     •  Oil  and  gas  companies  have  generally  performed                                                                    
     poorly  and  investors  have  demanded  better  capital                                                                    
     discipline, improved  financial performance  and action                                                                    
     on climate change.                                                                                                         
                                                                                                                                
1:08:57 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  HANNAN  asked  whether  the  information  in  the                                                               
PowerPoint accounted for the recent Russian invasion of Ukraine.                                                                
                                                                                                                                
MR.  CLINE  replied that  the  slides  were prepared  before  the                                                               
invasion, but  at a time  when the situation was  looking "dire."                                                               
He said  he would comment  on the  demand for oil  resulting from                                                               
sanctions, as well as from the decreased demand in Ukraine.                                                                     
                                                                                                                                
1:11:07 PM                                                                                                                    
                                                                                                                                
MR. CLINE presented slide 4,  "Energy Demand Outlook," which read                                                               
as follows [original punctuation provided]:                                                                                     
                                                                                                                                
     •  World energy  demand is  expected to  grow but  many                                                                    
     different  scenarios  are   being  discussed  with  key                                                                    
     differentiators being:                                                                                                     
             Costs  of  energy  supply  particularly  fossil                                                                    
          fuels vs renewables/low carbon.                                                                                       
              The  nature   of   governmental  and   private                                                                    
          initiatives to decarbonise.                                                                                           
            The pace of change.                                                                                                 
     • Under all scenarios  significant investment is needed                                                                    
     to meet demand and offset existing oil & gas decline.                                                                      
                                                                                                                                
1:13:23 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE RAUSCHER asked whether the  drop in demand in 2020                                                               
was due to the COVID-19 pandemic.                                                                                               
                                                                                                                                
MR. CLINE  confirmed Representative Rauscher's  understanding was                                                               
correct.                                                                                                                        
                                                                                                                                
1:14:02 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  HANNAN pointed  out  the differentiation  between                                                               
hydroelectric  power and  renewable  energy.   She asked  whether                                                               
hydroelectric power is considered renewable energy.                                                                             
                                                                                                                                
MR. CLINE  answered that  hydroelectric projects  were considered                                                               
renewable and added  that he saw no reason not  to consider small                                                               
scale hydroelectric projects as viable.                                                                                         
                                                                                                                                
1:15:35 PM                                                                                                                    
                                                                                                                                
MR. CLINE presented  slide 5, "Energy Transition,"  which read as                                                               
follows [original punctuation provided]:                                                                                        
                                                                                                                                
     • The global  energy mix is decarbonizing  and the pace                                                                    
     of change is accelerating.                                                                                                 
             COP26 UN  Climate Change  Conference more  than                                                                    
          140  nations committed  to  eliminate  90% of  GHG                                                                    
          emissions.                                                                                                            
            2050 Net Zero GHG  Targets: US net zero no later                                                                    
          than  2050  with  a  50-52%  reduction  from  2005                                                                    
          levels by 2030.                                                                                                       
              2030  Methane   Reduction  Target:   Over  100                                                                    
          countries  commit to  reduce methane  emissions by                                                                    
          30% by 2030.                                                                                                          
                                                                                                                                
     • Investment dollars  will flow disproportionately into                                                                    
     clean energy.                                                                                                              
             The  Bipartisan  Infrastructure  Deal  includes                                                                    
          US$6.5 Bn for national  network of EV chargers and                                                                    
          US$65   Bn  in   clean  energy   transmission  and                                                                    
          electric grid in support  of a 100% pollution-free                                                                    
          power sector by 2035.                                                                                                 
            International  finance: 25  countries, including                                                                    
          the US,  and 5  financial institutions  pledged to                                                                    
          end new international  finance for unabated fossil                                                                    
          fuel energy by the end of 2022.                                                                                       
                                                                                                                                
     • Hydrocarbon  producers with the highest  cost and the                                                                    
     highest carbon emission intensity  products will be the                                                                    
     first to be impacted.                                                                                                      
                                                                                                                                
1:20:05 PM                                                                                                                    
                                                                                                                                
CHAIR  PATKOTAK asked  how much  access  infrastructure would  be                                                               
necessary to reach Alaska's natural resources.                                                                                  
                                                                                                                                
MR.  CLINE  emphasized  the  importance  of  developing  Alaska's                                                               
resource infrastructure  and explained  how easier access  to its                                                               
resources would be beneficial to the state.                                                                                     
                                                                                                                                
1:24:44 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  RAUSCHER asked  is other  countries with  natural                                                               
resources were  facing similar  issues with regard  to a  lack of                                                               
resource infrastructure.                                                                                                        
                                                                                                                                
MR. CLINE  explained that Alaska's technically  challenging, high                                                               
cost  developments were  really  only comparable  to places  like                                                               
Norway.   He said that  he used Norway as  an example due  to its                                                               
similarly high cost of development.                                                                                             
                                                                                                                                
1:28:09 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE HANNAN  asked for  a more detailed  explanation of                                                               
the term "supermajor" company.                                                                                                  
                                                                                                                                
MR.  CLINE  pointed to  Chevron,  British  Petroleum, Shell,  and                                                               
Total as examples of supermajor gas companies.                                                                                  
                                                                                                                                
1:29:37 PM                                                                                                                    
                                                                                                                                
MR. CLINE  resumed the  presentation on  slide 7,  which detailed                                                               
how various  countries worked to  respond to changing  global gas                                                               
market conditions.   He emphasized Alaska's capacity  to adapt to                                                               
changing global markets due to its underdeveloped position.                                                                     
                                                                                                                                
1:37:33 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE HANNAN asked why  Canada was different than Norway                                                               
with regard to the operation of its oil and gas investment.                                                                     
                                                                                                                                
MR. CLINE said  that oil and gas investment in  arctic regions is                                                               
generally disfavored if  it can be avoided,  therefore Canada has                                                               
invested mainly in its heartland region.                                                                                        
                                                                                                                                
1:41:01 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE SCHRAGE shared  his understanding that instability                                                               
in  Alaska's  oil and  gas  industry  was influenced  by  federal                                                               
legislation.                                                                                                                    
                                                                                                                                
MR.  CLINE confirmed  Representative Schrage's  understanding and                                                               
explained  that  tax  stability   would  be  a  net-positive  for                                                               
Alaska's oil and gas industry.                                                                                                  
                                                                                                                                
1:44:02 PM                                                                                                                    
                                                                                                                                
MR.  CLINE resumed  the presentation  on  slide 9,  which gave  a                                                               
detailed outlook  on the future  of the  oil and gas  industry in                                                               
Alaska.   He moved to  slide 10, which compared  Alaska's natural                                                               
resource  infrastructure  to  the  "Lower  48"  natural  resource                                                               
infrastructure  and continued  to  slide 11,  which outlined  the                                                               
state revenues achieved by oil and gas production.                                                                              
                                                                                                                                
1:48:07 PM                                                                                                                    
                                                                                                                                
MR. FULFORD picked up the presentation  on slide 13, which gave a                                                               
broad  overview of  the volatility  of the  price of  natural gas                                                               
between 2020 and 2022.                                                                                                          
                                                                                                                                
1:54:15 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE RAUSCHER  asked how the  price of natural  gas had                                                               
behaved in the previous 4 months.                                                                                               
                                                                                                                                
MR.  FULFORD  answered   that  the  price  of   natural  gas  had                                                               
stabilized in the previous 4 months.                                                                                            
                                                                                                                                
1:56:23 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE HANNAN  asked how  long it generally  took natural                                                               
gas to hit the market once it was extracted.                                                                                    
                                                                                                                                
MR. FULFORD answered that it might  take up to five years to sell                                                               
gas after it had been extracted.                                                                                                
                                                                                                                                
2:00:13 PM                                                                                                                    
                                                                                                                                
MR. FULFORD resumed the presentation  on slide 14, which detailed                                                               
the  global  marked  context  of   Liquified  Natural  Gas  (LNG)                                                               
development.                                                                                                                    
                                                                                                                                
2:03:44 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE SCHRAGE  asked if there were  any "non traditional                                                               
ways" that states had advertised their oil and gas programs.                                                                    
                                                                                                                                
MR.  FULFORD  pointed  to  the importance  and  social  power  of                                                               
advertising   gas  processing   and   the   conversion  to   more                                                               
environmentally  friendly  fuels  as  a way  to  push  forward  a                                                               
conventional LNG project.                                                                                                       
                                                                                                                                
2:10:00 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE HANNAN  asked what the  cost of developing  gas at                                                               
an LNG plant would be.                                                                                                          
                                                                                                                                
MR. FULFORD explained  that the price of gas would  be similar to                                                               
most other LNG.                                                                                                                 
                                                                                                                                
2:13:03 PM                                                                                                                    
                                                                                                                                
MR.  FULFORD   resumed  the  presentation  on   slide  15,  which                                                               
displayed a  graph that gave  a complex comparison of  high level                                                               
guideline project economics in Alaska versus China.                                                                             
                                                                                                                                
2:16:46 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  MCKAY asked  if  it could  be  possible to  avoid                                                               
constructing an LNG pipeline by utilizing icebreaker ships.                                                                     
                                                                                                                                
MR.  FULFORD  answered that  both  the  literal and  metaphorical                                                               
climate  for shipping  LNG has  greatly improved  in the  last 10                                                               
years.                                                                                                                          
                                                                                                                                
2:19:06 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  SCHRAGE  asked  about  the viability  of  an  LNG                                                               
project  in   Alaska's  arctic   if  it  were   to  be   such  an                                                               
environmentally challenging project to move forward.                                                                            
                                                                                                                                
MR. FULFORD explained that an LNG  plant could produce as much as                                                               
1 gigawatt  of waste energy  in the form  of heat and  pointed to                                                               
regasification as a potential antidote to the concern.                                                                          
                                                                                                                                
2:21:10 PM                                                                                                                    
                                                                                                                                
MR.  FULFORD  continued  the  presentation  on  slide  16,  which                                                               
compared  the strengths,  weaknesses, opportunities,  and threats                                                               
of LNG investment in Alaska.                                                                                                    
                                                                                                                                
2:23:07 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  HANNAN asked  why  Alaska is  considered to  have                                                               
different geopolitical stability compared to the Lower 48.                                                                      
                                                                                                                                
MR. FULFORD replied that Alaska  is in a more vulnerable position                                                               
geopolitically than the contiguous United States.                                                                               
                                                                                                                                
2:24:12 PM                                                                                                                    
                                                                                                                                
MR. CLINE  proceeded to  the next part  of the  presentation with                                                               
slide  17, "Alaska's  Competitive Factors,"  and presented  slide                                                               
18,  "OPEX/CAPEX Comparison,"  which  read  as follows  [original                                                               
punctuation provided]:                                                                                                          
                                                                                                                                
     • Alaska is a relatively high cost environment:                                                                            
             Most development  statements and  data suggests                                                                    
          US$8-15/Bbl   of  development   costs,  which   is                                                                    
          comparable   to  other   high  cost   developments                                                                    
          (ongoing     unconventional     developments     &                                                                    
          deepwater).                                                                                                           
                                                                                                                                
             Operating  costs   are  dependent  on  existing                                                                    
          facilities, remoteness,  weather and accessibility                                                                    
          but broadly observed to be between US$7-12/Bbl.                                                                       
                                                                                                                                
             Significant  transport costs  of  US$8-$10/Bbl,                                                                    
          which   is  higher   than   most  other   upstream                                                                    
          opportunities.     Unit costs  further  challenged                                                                    
          due to gas and NGL monetization limitations.                                                                          
                                                                                                                                
MR. CLINE presented slide 19, "Fiscal Comparison," which read as                                                                
follows [original punctuation provided]:                                                                                        
                                                                                                                                
     • Chart  illustrates general  $/bbl cash  breakdown and                                                                    
     tax burden for  select jurisdictions over an  oil & gas                                                                    
     development's life cycle                                                                                                   
            Assumes characteristics  with new development in                                                                    
          Alaska, including constant cost environment                                                                           
               • In reality each jurisdiction will have                                                                         
               numerous unique  characteristics (development                                                                    
               timeframe, cost environment,                                                                                     
               infrastructure/market proximity etc.)                                                                            
                                                                                                                                
     • Alaska  has relatively high government  take compared                                                                    
     to select jurisdictions                                                                                                    
                                                                                                                                
     •   Worth  noting   that  some   fiscal  elements   are                                                                    
     considered more burdensome than others                                                                                     
            Non-Income  based taxes, such as  royalty, carry                                                                    
          elevated risk  to investors because of  timing and                                                                    
          it  is  not  responsive  to  development/operating                                                                    
          costs                                                                                                                 
                                                                                                                                
     •  Many  other  competing  jurisdictions,  particularly                                                                    
     non-western, implement asset level contracts                                                                               
            Popular for oil and gas dependent governments                                                                       
            Allows  for fiscal terms specific  to assets and                                                                    
          reflecting current economic conditions                                                                                
              Often   contains  various   risk   mitigations                                                                    
          including fiscal stabilization                                                                                        
                                                                                                                                
2:29:09 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE HANNAN asked about Australia's "government take."                                                                
                                                                                                                                
MR. CLINE explained that the oil and gas tax rate was close to                                                                  
60 percent.                                                                                                                     
                                                                                                                                
2:30:11 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE SCHRAGE commented that there is a great need to                                                                  
look at the federal regulatory environment that governs oil and                                                                 
gas development in Alaska.                                                                                                      
                                                                                                                                
2:31:12 PM                                                                                                                    
                                                                                                                                
MR. CLINE presented slide 20, "Alaska Competitiveness Globally,"                                                                
which read as follows [original punctuation provided]:                                                                          
                                                                                                                                
     •  Alaska's upstream  investment has  faired reasonably                                                                    
     in line with global trends:                                                                                                
            Some major Alaska  operators, such as Conoco and                                                                    
          Hillcorp, have  clearly increased  Alaska exposure                                                                    
          as  a  percentage  of  total  capital  budgets  in                                                                    
          recent years.                                                                                                         
             Exploration  has  been healthy  in  last  10-12                                                                    
          years.                                                                                                                
                                                                                                                                
     • A key challenge for  Alaska and the companies will be                                                                    
     maturing discoveries into developments.                                                                                    
                                                                                                                                
     •  The   projects  take  years   to  progress   to  the                                                                    
     investment  decision and  years from  that decision  to                                                                    
     reach production.                                                                                                          
                                                                                                                                
     •  Alaska is  entering a  critical phase  that will  be                                                                    
     decisive in long-term production trends.                                                                                   
                                                                                                                                
2:35:22 PM                                                                                                                    
                                                                                                                                
MR. CLINE  proceeded to  the section  of the  presentation titled                                                               
"Alaska Oil Moving  Forward," and he presented  slide 22, "Alaska                                                               
Development   Scenarios,"  which   read   as  follows   [original                                                               
punctuation provided]:                                                                                                          
                                                                                                                                
     •   There   is   strong   potential   for   major   new                                                                    
     developments,   as   well    as   smaller   incremental                                                                    
     developments    built    around   existing    or    new                                                                    
     infrastructure hubs.                                                                                                       
                                                                                                                                
     •  To  understand  the potential  contribution  of  new                                                                    
     investments to  Alaska state revenues and  to gauge the                                                                    
     downside  risk   if  new  investments   are  curtailed,                                                                    
     indicative profiles have  been developed representative                                                                    
     of Alaska new investment opportunities:                                                                                    
            A  significant new development justifying  a new                                                                    
          infrastructure  hub,  similar   to  the  Pikka  or                                                                    
          Willow developments.                                                                                                  
            A smaller incremental  development tying into an                                                                    
          existing    infrastructure    or    infrastructure                                                                    
          associated with a new development.                                                                                    
                                                                                                                                
     •  The evaluation  summarizes  the estimated  'investor                                                                    
     return'  and   generated  'state  revenue'   under  the                                                                    
     current and  proposed tax  changes as  well as  under a                                                                    
     variety of sensitivities.                                                                                                  
                                                                                                                                
MR. CLINE presented slide 23, "Pikka Scale Development," which                                                                  
read as follows [original punctuation provided]:                                                                                
                                                                                                                                
     •   Material   new   developments  could   create   new                                                                    
     infrastructure hubs with numerous benefits                                                                                 
              Development  generates   material  new   state                                                                    
          revenue, US$6-7 Billion over 20 years.                                                                                
              Enables    numerous   additional   incremental                                                                    
          developments (in  this example  Pikka Phase  2 and                                                                    
          Quokka) detailed on following slide.                                                                                  
            Potentially extend TAPS infrastructure life.                                                                        
                                                                                                                                
     • However, developments are more challenging due to:                                                                       
            Significant development  risks, capital and time                                                                    
          during the development period.                                                                                        
            Up  to 20-year time horizon  to realize expected                                                                    
          economic  returns  means  perceptions  of  market,                                                                    
          fiscal and regulatory risk heightened.                                                                                
                                                                                                                                
2:41:13 PM                                                                                                                    
                                                                                                                                
MR. CLINE presented slide 24, "Incremental Developments," which                                                                 
read as follows [original punctuation provided]:                                                                                
                                                                                                                                
     •   Incremental   developments    tie   into   existing                                                                    
     infrastructure  and  benefit from  shorter  development                                                                    
     periods.                                                                                                                   
                                                                                                                                
     • The  returns on  the assumed  incremental development                                                                    
     are attractive under current prices.                                                                                       
                                                                                                                                
     • Each development  of this size could  add over US$150                                                                    
     MM+  per year  in peak  years  and US$1.5  Bn of  total                                                                    
     state revenue.                                                                                                             
                                                                                                                                
MR. CLINE concluded the presentation on slide 25, "Concluding                                                                   
Remarks," which read as follows [original punctuation provided]:                                                                
                                                                                                                                
     • Alaska oil & gas  faces many challenges going forward                                                                    
     but it remains an attractive oil & gas province.                                                                           
                                                                                                                                
     • New developments are required  to offset the historic                                                                    
     downward trend in production and revenues.                                                                                 
          • Without  new developments  there is also  a risk                                                                    
          of reaching TAPS minimum production threshold                                                                         
          •   New  developments   will  generate   jobs  and                                                                    
          economic activity throughout value chain                                                                              
                                                                                                                                
     • New  developments will be costly  and challenging and                                                                    
     operators,  investors   and  lenders   need  regulatory                                                                    
     visibility  and fiscal  stability to  support financial                                                                    
     decisions for these long-term projects.                                                                                    
                                                                                                                                
     •  Giant   projects  are  unlikely  but   new  material                                                                    
     developments   with  numerous   smaller  tie-backs   to                                                                    
     infrastructure  hubs  offer  a path  to  reversing  the                                                                    
     decline.                                                                                                                   
                                                                                                                                
     • The  global competition for new  investment is fierce                                                                    
     and  maintaining an  attractive fiscal,  regulatory and                                                                    
     administrative environment will be key.                                                                                    
                                                                                                                                
2:44:46 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE HANNAN asked about the choice of words on slide                                                                  
25.                                                                                                                             
                                                                                                                                
MR. CLINE responded that specific wording was used in concern                                                                   
for specific detail to Alaska's oil and gas development.                                                                        
                                                                                                                                
2:46:20 PM                                                                                                                    
                                                                                                                                
CHAIR PATKOTAK thanked the presenters for their time and                                                                        
commented his belief that Alaska must "do what it can" to make                                                                  
itself more attractive to foreign oil and gas development.                                                                      
                                                                                                                                
2:47:22 PM                                                                                                                    
                                                                                                                                
The committee took an at-ease from 2:47 p.m. to 2:51 p.m.                                                                       
                                                                                                                                
            HB 347-CONFIDENTIALITY OF ANIMAL RECORDS                                                                        
                                                                                                                                
2:51:29 PM                                                                                                                    
                                                                                                                                
CHAIR PATKOTAK announced  that the final order  of business would                                                               
be HOUSE  BILL NO. 347,  "An Act relating to  the confidentiality                                                               
of certain state  records relating to animals;  and providing for                                                               
an effective date."                                                                                                             
                                                                                                                                
CHAIR  PATKOTAK  stated  that   the  sponsor  has  requested  the                                                               
committee to adopt a proposed committee substitute.                                                                             
                                                                                                                                
2:51:55 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  HOPKINS moved  to  adopt  the proposed  committee                                                               
substitute  (CS)  for  HB   347,  Version  32-LS1471\I,  Bullard,                                                               
2/28/22,  as the  working document.   There  being no  objection,                                                               
Version I was before the committee.                                                                                             
                                                                                                                                
2:52:18 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE RAUSCHER, as prime  sponsor of HB 347, paraphrased                                                               
from the  sponsor statement [included  in the  committee packet],                                                               
which read [original punctuation provided]:                                                                                     
                                                                                                                                
     HB  347  is  an  act allowing  confidentiality  to  all                                                                    
     owner's  quadruped animals  when getting  their animals                                                                    
     tested for things like contagious viruses.                                                                                 
                                                                                                                                
     The  bill allows  information on  the results  of those                                                                    
     tests to be made available  to those that ask, however,                                                                    
     the owner's name and location  is redacted for safety's                                                                    
     sake.  It  allows  the data  needed  to  make  accurate                                                                    
     assessments  from  DEC   [Department  of  Environmental                                                                    
     Conservation]  and or  the State  Veterinarian to  move                                                                    
     forward in  case of an  outbreak but keeps the  name of                                                                    
     the owner from being made public.                                                                                          
                                                                                                                                
     The bill  has taken 5  years to  get this far,  and the                                                                    
     current version is accepted by  most hunting groups and                                                                    
     farmers alike.                                                                                                             
                                                                                                                                
     Groups  such  as  the Farm  Bureau,  SCI  [Safari  Club                                                                    
     International], the  Alaskan Sheep Foundation,  and the                                                                    
     Department  of Environmental  Conservation all  support                                                                    
     its passing.                                                                                                               
                                                                                                                                
REPRESENTATIVE RAUSCHER noted that HB 347 also allows the public                                                                
to give consultation or opinion on the collected data as it                                                                     
pertains to moving forward.                                                                                                     
                                                                                                                                
2:54:29 PM                                                                                                                    
                                                                                                                                
RYAN MCKEE,  Staff, Representative George Rauscher,  Alaska State                                                               
Legislature, on behalf of  Representative Rauscher, prime sponsor                                                               
of HB 347,  gave the sectional analysis  for  Version I [included                                                               
in  the  committee  packet],  which  read  as  follows  [original                                                               
punctuation provided]:                                                                                                          
                                                                                                                                
     Section 1: AS 03.05                                                                                                      
     It is  amended by adding  a new section,  AS 03.05.084,                                                                    
     Confidentiality of Certain  Information, Exceptions. It                                                                    
     states that  a record  containing information  about an                                                                    
     animal  that   is  maintained  by  the   Department  of                                                                    
     Environmental   Conservation   will   carry   out   the                                                                    
     requirements of  this chapter  including the  record of                                                                    
     sale, movement, unique  identification number, or owner                                                                    
     of  an  animal  is  confidential  and  not  subject  to                                                                    
     disclosure under AS  40.25.100-40.25.295, if the record                                                                    
     identifies  a particular  animal, breed  of an  animal,                                                                    
     business, or  individual; contains  test results,  or a                                                                    
     record  of test  samples, for  a particular  animal; or                                                                    
     contains  trade  secrets  or  proprietary  business  or                                                                    
     financial  information. It  also states  the Department                                                                    
     of   Environmental  Conservation   may  disclose   this                                                                    
     information  to state,  federal,  local government,  or                                                                    
     regional  health corporation  if  the department  feels                                                                    
     there is a  health or safety threat of an  animal or to                                                                    
     the   public.    The   Department    of   Environmental                                                                    
     Conservation  shall,  upon request,  publicly  disclose                                                                    
     records  subject  to  this section  in  a  manner  that                                                                    
     prevents   identification  of   a  particular   animal,                                                                    
     individual, or business.                                                                                                   
                                                                                                                                
     Section 2: The  uncodified law of the  State of Alaska,                                                                  
     Transition: Regulations                                                                                                  
     This  is   amended  by  adding   a  new   section.  The                                                                    
     Department  of  Environmental  Conservation  may  adopt                                                                    
     regulations necessary  to implement this Act  and takes                                                                    
     effect under  AS 44.62 (Administrative  Procedure Act),                                                                    
     but not before the effective date.                                                                                         
                                                                                                                                
     Section  3:   Section  2  of  this   act  takes  effect                                                                  
     immediately under AS 01.10.070(c).                                                                                         
                                                                                                                                
CHAIR PATKOTAK [opened invited testimony on HB 347, Version I.]                                                                 
                                                                                                                                
2:57:07 PM                                                                                                                    
                                                                                                                                
AMY  SEITZ,  Executive  Director, Alaska  Farm  Bureau,  provided                                                               
invited testimony  in support  of HB  347.   She said  the Alaska                                                               
Farm Bureau's  mission is  to ensure  the economic  wellbeing and                                                               
expansion of  agriculture and to  enrich the quality of  life for                                                               
all  Alaskans.   She  noted  that the  bureau's  400 farming  and                                                               
ranching members  drive the bureau's positions  on policy issues,                                                               
and today she is speaking in support of HB 347.                                                                                 
                                                                                                                                
MS.  SEITZ related  that  for each  of the  last  five years  the                                                               
bureau's  members  have  said  it is  important  to  protect  the                                                               
personal,  business,  and  individual animal  information  housed                                                               
within DEC from release to  the public.  Because this information                                                               
is currently subject to the  Public Records Act, many farmers are                                                               
reluctant to have the information go  through the state.  In some                                                               
situations, state  or federal law requires  specific information;                                                               
for example, importing  animals [to Alaska] and  running tests in                                                               
Grade  A dairies  [in Alaska]  must go  through DEC.   There  are                                                               
situations  where it  is voluntary  as to  what information  goes                                                               
through, but  it would be  helpful to have the  information, like                                                               
participating in  disease surveillance programs.   These programs                                                               
are designed to be pro-active  in identifying a disease and being                                                               
able to take steps to  mitigate before there becomes an outbreak.                                                               
The bureau  wants its  farmers to  feel comfortable  working with                                                               
state  agencies and  having security  in knowing  their personal,                                                               
business, or financial information isn't  going to be released to                                                               
the public, or information identifying specific animals.                                                                        
                                                                                                                                
MS.  SEITZ  said that  in  this  time  when  Alaska needs  to  be                                                               
increasing  its  food production  it's  important  to have  these                                                               
protections  in  place.   Having  more  farmers participating  in                                                               
testing can  help produce a  higher quality product  and increase                                                               
efficiency  in  production.    Also, it  could  help  with  early                                                               
detection of a possible outbreak,  which would give agencies time                                                               
to  respond  appropriately.    There would  still  be  access  to                                                               
general  information and  people  would still  know what's  being                                                               
imported and  whether any diseases,  pathogens, or  parasites are                                                               
being found.   It would be  like COVID-19 reporting -  the number                                                               
of positives in a region is known but who has it is unknown.                                                                    
                                                                                                                                
MS.  SEITZ  addressed  why  it   is  important  to  protect  this                                                               
information.   She said  livestock farmers  in other  states have                                                               
sometimes been harassed by  anti-livestock organizations.  During                                                               
COVID-19 some  states had problems  with pilfering on  the farms.                                                               
Some  Alaska farms  have had  issues with  people stealing  their                                                               
animals.   There have  also been situations  where someone  has a                                                               
grudge against  a farmer and  can access testing  information and                                                               
spread a rumor that a certain  farmer has an unclean farm because                                                               
the farmer is testing for a  certain pathogen.  Ms. Seitz further                                                               
noted that in addition to  farmers and ranchers being impacted by                                                               
this, kennels have testing that goes through DEC.                                                                               
                                                                                                                                
3:03:34 PM                                                                                                                    
                                                                                                                                
CHRISTINA CARPENTER, Director,  Division of Environmental Health,                                                               
Department  of   Environmental  Conservation,   provided  invited                                                               
testimony in support  of HB 347.  She noted  that the Division of                                                               
Environmental   Health  includes   the   Office   of  the   State                                                               
Veterinarian (OSV) which  is tasked with oversight  of the animal                                                               
records impacted  by this  legislation.  She  stated that  HB 347                                                               
strikes  a perfect  balance by  allowing DEC  to keep  its animal                                                               
owner information confidential while  keeping the public informed                                                               
about known animal  disease outbreaks.  The  bill will strengthen                                                               
the agriculture  community by encouraging  increased surveillance                                                               
testing which  will in turn protect  Alaska's wildlife resources.                                                               
She thanked the sponsor for bringing forth the bill.                                                                            
                                                                                                                                
3:04:44 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  SCHRAGE asked  whether  the  volume of  documents                                                               
would  be  large enough  to  result  in  a  fiscal note  for  the                                                               
redacting process  that will be  needed for keeping some  of this                                                               
information confidential.                                                                                                       
                                                                                                                                
MS. CARPENTER replied that the fiscal  note for HB 347 is zero as                                                               
DEC doesn't anticipate increased needs  for its staff since it is                                                               
a relatively  small number of  documents.  She drew  attention to                                                               
the  Certificate  of  Export provided  to  the  committee,  which                                                               
includes the  shipper's information, receiver's  information, and                                                               
specific  information about  the animal  and test  results.   She                                                               
explained  that if  HB  347 were  passed, DEC  would  be able  to                                                               
provide  general information  to the  public along  the lines  of                                                               
"nine reindeer were  exported from Alaska in 2021  and all tested                                                               
negative for tuberculosis prior to movement."                                                                                   
                                                                                                                                
3:06:56 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE   HANNAN   asked   whether   other   states   have                                                               
confidentiality like  that proposed  in HB 347,  especially those                                                               
states with much higher livestock management.                                                                                   
                                                                                                                                
MS. CARPENTER responded that most  states do have confidentiality                                                               
legislation  or allowances  in statute.    When researching  this                                                               
previously, DEC looked to the statutes of Oregon and Washington.                                                                
                                                                                                                                
REPRESENTATIVE HANNAN  surmised Alaska has far  more kennels with                                                               
veterinary needs  than cattle with  veterinary needs, yet  HB 347                                                               
was drafted  in terms of  agriculture and farming.   She recalled                                                               
Ms.  Seitz stating  that the  bill would  lead to  more voluntary                                                               
testing.  She inquired about  which tests are mandated in statute                                                               
and which are  optional and further asked whether  the sharing of                                                               
data is  mandatory or voluntary  for transmissible  diseases like                                                               
kennel cough and rabies.                                                                                                        
                                                                                                                                
MS. CARPENTER  answered that the only  testing currently mandated                                                               
through statute  or regulation is  when importing an  animal into                                                               
the state; DEC has requirements  for several species.  When there                                                               
is a known or suspected  disease outbreak throughout the state or                                                               
in  a   certain  region,  the  state   veterinarian,  the  Alaska                                                               
Department of Fish and Game  (ADF&G) veterinarian, and the Health                                                               
and  Social Services  veterinarian  work with  animal owners  and                                                               
private veterinarians.  The department  believes that HB 347 will                                                               
encourage  more  surveillance  testing  so that  when  a  dog  or                                                               
livestock  already  in  the state  display  symptoms  the  proper                                                               
actions  can be  taken  to  get that  animal  tested and  respond                                                               
appropriately.  The department has  a list of reportable diseases                                                               
in statute and  in regulation so that an  animal testing positive                                                               
through  a  private  veterinarian  is  reportable  to  the  state                                                               
veterinarian.  She offered to provide those details to members.                                                                 
                                                                                                                                
REPRESENTATIVE  HANNAN  stated she  would  like  to receive  this                                                               
information  because  she  is  curious  about  what  the  state's                                                               
reporting requirements  are.  She  said she isn't opposed  to the                                                               
idea  of  confidentiality  but  wants  to  ensure  there  are  no                                                               
unintended ripple effects.                                                                                                      
                                                                                                                                
3:12:47 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  CRONK offered  his  understanding  that the  main                                                               
purpose  of  HB  347  is   to  ensure  that  Alaska's  wild  game                                                               
populations don't get these diseases.                                                                                           
                                                                                                                                
REPRESENTATIVE RAUSCHER  responded that  the worry in  Alaska for                                                               
five-plus years  has been over keeping  [Mycoplasma ovipneumoniae                                                               
(Movi)] away  from Dall  sheep and mountain  goats.   An outbreak                                                               
occurred  in the  Lower 48  where  there is  free range  farming.                                                               
Since  that cannot  be  done  in Alaska  due  to wild  predators,                                                               
farmers  put up  fencing but  contact between  domestic and  wild                                                               
animals  is still  a possibility.   Given  that Movi  is a  life-                                                               
threatening disease for these wild  animals, farmers are probably                                                               
going to  want to get  their herds tested, but  currently farmers                                                               
are afraid to test because  the information about their farms may                                                               
become  public and  then there  could be  a reaction  against the                                                               
farmer, the farm, or the animals  themselves.  So, what is trying                                                               
to be done with HB 347 is  encourage the testing for every one of                                                               
these  because  the most  important  part  is  to get  this  data                                                               
recorded, who  the farmer  is isn't  important.   The information                                                               
that needs to  be acquired is the location and  whether an animal                                                               
has  contracted  the  disease.   This  bill  entices  the  farmer                                                               
because  he/she won't  be found  out  and the  information is  as                                                               
important to the farmer  as it is to the herd in  the wild.  What                                                               
comes across  the border is  already being taken care  of because                                                               
they must be tested, HB 347  makes sure that the herds within the                                                               
state  are taken  care of.    He offered  his understanding  that                                                               
about 2,000 [domestic] animals are in Alaska.                                                                                   
                                                                                                                                
REPRESENTATIVE  HANNAN asked  if  testing for  Movi is  currently                                                               
required  or whether  that  will be  contemplated  once there  is                                                               
confidentiality of records.   If testing is  voluntary, she said,                                                               
there is no guarantee that testing will be done.                                                                                
                                                                                                                                
REPRESENTATIVE RAUSCHER replied  that current regulation requires                                                               
an  animal be  tested before  being brought  into the  state.   A                                                               
regulation is done by DEC, so  it is a possibility that when this                                                               
bill passes the answer to the question may be yes.                                                                              
                                                                                                                                
MS. CARPENTER  responded that,  currently, once  an animal  is in                                                               
Alaska, surveillance  testing is  completely voluntary.   At this                                                               
time, she  continued, there are  no plans to  implement mandatory                                                               
testing for Movi or any other pathogen.                                                                                         
                                                                                                                                
3:17:41 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  SCHRAGE thanked  the sponsor  for bringing  forth                                                               
the legislation.                                                                                                                
                                                                                                                                
3:18:04 PM                                                                                                                    
                                                                                                                                
CHAIR PATKOTAK announced that HB 347 was held over.                                                                             
                                                                                                                                
3:18:47 PM                                                                                                                    
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
There being no further business before the committee, the House                                                                 
Resources Standing Committee meeting was adjourned at 3:19 p.m.                                                                 

Document Name Date/Time Subjects
HB 347 Sponsor Statement.pdf HRES 3/2/2022 1:00:00 PM
HRES 3/4/2022 1:00:00 PM
HB 347
HB 347 Sectional Analysis Version I 3.2.2022.pdf HRES 3/2/2022 1:00:00 PM
HRES 3/4/2022 1:00:00 PM
HB 347
HB 347 Proposed CS Version I 3.2.2022.pdf HRES 3/2/2022 1:00:00 PM
HRES 3/4/2022 1:00:00 PM
HB 347
HB 347 Letter of Support Farm Bureau 3.2.2022.pdf HRES 3/2/2022 1:00:00 PM
HRES 3/4/2022 1:00:00 PM
HB 347
HB 347 Supporting Document DEC Certificate of Veterinary Inspection 3.2.2022.pdf HRES 3/2/2022 1:00:00 PM
HRES 3/4/2022 1:00:00 PM
HB 347
HB 347 Draft Fiscal Note DEC EH 3.2.2022.pdf HRES 3/2/2022 1:00:00 PM
HRES 3/4/2022 1:00:00 PM
HB 347
Presentation FINAL Gaffney Cline Oil Gas Competitiveness 3.4.2022.pdf HRES 3/4/2022 1:00:00 PM