Legislature(2015 - 2016)BUTROVICH 205
03/16/2015 03:30 PM Senate RESOURCES
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| Audio | Topic |
|---|---|
| Start | |
| HJR4 | |
| Confirmation Hearing: Attorney General Craig Richards | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | HJR 4 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| + | TELECONFERENCED |
HJR 4-OFFSHORE OIL & GAS REVENUE SHARING
3:31:10 PM
CHAIR GIESSEL announced HJR 4 to be up for consideration.
3:31:15 PM
REPRESENTATIVE DAN SADDLER, Alaska State Legislature, Juneau,
Alaska, sponsor of HJR 4, explained that this resolution calls
upon the federal government to enact a fair and sensible system
of federal revenue sharing in Alaska. He said that oil and gas
development in federal areas can be a boom for the country
providing revenues for the federal government, jobs and a secure
source of domestic energy, but it also creates costly impacts to
nearby states.
The federal government shares the proceeds from such development
with some states to help them offset the costs of improvements
and services necessary for safe and responsible development. On
inshore areas they share 50 percent of the revenue with states
where that production occurs. In states within three miles of
shore, it shares 27 percent and in the four states bordering the
Gulf of Mexico it shares 37.5 percent (Gulf of Mexico Energy
Security Act of 2006). But current federal law says the State of
Alaska (SOA) receives a zero share of the federal revenues from
the Chukchi and Beaufort Seas oil or from other OCS areas.
The federal areas off the North Slope hold tremendous amounts of
oil and gas. Shell's supplemental environmental impact statement
(EIS) for the Chukchi Sea indicated 3 billion-plus barrels of
oil. But just as onshore development on the North Slope required
investments in infrastructure, development of Alaska's offshore
oil and gas will also require investments.
3:33:03 PM
REPRESENTATIVE SADDLER said investments will be required by the
state for roads, ports, airports, utilities, housing, pipelines,
and services such as oil spill and emergency response,
environmental monitoring and mitigation and public health and
safety.
For example, the $2.75 billion generated by the sale of federal
leases in the Beaufort and the Chukchik Seas several years ago
would have brought the state about $1 million if the same
revenue sharing applied in Alaska as applied in Gulf of Mexico
states. In the future, Alaska will get zero percent from the
Chukchi Sea development.
He said this is an important resolution and comes at a time when
the OCS sharing issue is ripe in Washington, D.C., where Senator
Murkowski has pushed legislation in the last two years to insure
a fair share in states other than Gulf of Mexico states. This
will give her support as she pushes the issue again. The
president proposed OCS expansion on the Atlantic Coast, but cut
off the possibility of it in the Beaufort and Chukchi Seas.
SENATOR STOLTZE said the resolution refers to 50 percent revenue
sharing for oil leases whereas the Statehood Compact provided
for 90 percent sharing, which Congress overruled, and asked if
he was comfortable memorializing the 50 percent in the
resolution.
REPRESENTATIVE SADDLER responded that he shared his concern that
the federal government hasn't respected the commitments they
made to the state in the Statehood Act, however, in cooperating
with Senator Murkowski, he did not want to raise the statehood
issue, but rather wanted to strengthen her position on a 37.5
percent split.
SENATOR STOLTZE said he did not think saying he has a moral and
legal case for a higher percentage would diminish his argument
and that the best way to get less than you want is to agree to
ask for it before the negotiation is started.
SENATOR COGHILL agreed with Senator Stoltze that the 90 percent
should not be conceded in any form and had prepared conceptual
statements to maximize what the state could get through revenue
sharing.
REPRESENTATIVE SADDLER said he respected the desire to assert
the strongest possible case.
SENATOR STEDMAN commented that his impression was that Back East
wants to zero everyone out and to consider that in the word-
smithing, because they might want to make everyone like Alaska,
which is zero.
SENATOR COGHILL agreed.
CHAIR GIESSEL asked him if he was offering an amendment.
3:40:20 PM
SENATOR COGHILL replied that he wanted to leave it on the table
and give the sponsor time to digest the concept.
3:42:01 PM
SENATOR WIELECHOWSKI supported the resolution and asked if the
Statehood Act talks about 50 percent applying to offshore beyond
six miles.
REPRESENTATIVE SADDLER answered that there is a distinction
between the revenue sharing from federal lands onshore and
offshore and we should expect a 90/10 split onshore. That same
provision does not apply offshore to the best of his knowledge.
He clarified that this resolution does not call specifically for
a 37.5 percent share; it calls for consistently and equitably
sharing to allow for maneuvering room. He didn't see a problem
with considering the conceptual language now, but wanted the
chance to review it more thoroughly.
SENATOR STOLTZE said the key prize is OCS revenue sharing and
that anything is better than zero. He didn't think it would do
any harm to accurately reflect what the consistent state
position has been.
SENATOR STEDMAN said the session still has plenty of time and
they might think about broadening the concept to Wyoming coal to
pick up as much support from resource states as possible.
3:45:26 PM
CHAIR GIESSEL asked him to say more about the Land and Water
Conservation Fund on page 3, line 3.
REPRESENTATIVE SADDLER answered that it is generally considered
a mitigation fund. He cautioned against broadening the
resolution, because it was designed specifically to bolster the
U.S. Senate delegation as they work specifically on offshore
issues.
SENATOR COGHILL said that was an important point, because Alaska
will be joining all the Gulf Coast states as well as California
on this the OCS issue, especially since we have leases that have
both been leased and now are being withheld by this president.
He said his amendment would effectively delete the first two
whereas clauses and replace them with his whereas clause that
inserts equitable revenue sharing. But the final statement has
to be in support of the Gulf Coast states.
SENATOR STOLTZE said some rural entities outside of our
Congressional delegation have more of an aggressive lobbying
presence than Alaska does at times on revenue sharing issues.
REPRESENTATIVE SADDLER said that was a fair observation.
3:51:03 PM
SENATOR COGHILL asked if any study had been done on the Land and
Water Conservation Fund and Gulf of Mexico Energy Security Act.
REPRESENTATIVE SADDLER responded that he would review the
functioning of the Land and Water Conservation Fund and what the
balance is in time for the next meeting. It is an important
factor for passage of federal legislation, because they might
pick up more support if they can show that development of oil
and gas resources was going to what some perceive as the greater
good of environmental conservation or remediation.
3:53:02 PM
CARL PORTMAN, Deputy Director, Resource Development Council
(RDC), Anchorage, Alaska, supported HJR 4. He said like the Gulf
States, Alaska also contributes to national energy security
through onshore oil and gas development and has generated
billions of dollars to the federal treasury through offshore
leasing. These leases could contain tens of billions of barrels
of oil which in turn could generate hundreds of billions of
dollars in revenue.
RDC has consistently supported federal revenue sharing to
benefit the State of Alaska and local communities agree that
states sustaining offshore energy development and production
deserve a share of the revenue generated because they support
offshore operations and experience impacts to local services and
infrastructure. Federal government grants are inadequate in
addressing the need for additional investment in state
infrastructure or the increased demands on state and local
government resources resulting from offshore development,
especially in Alaska which has more coastline, more rural
communities, and less infrastructure than any other state. RDC
supports HJR 4 especially the concept behind it.
3:55:20 PM
KARA MORIARTY, President and CEO, Alaska Oil and Gas Association
(AOGA), Anchorage, Alaska, had technical difficulties and
couldn't continue her testimony.
3:56:02 PM
PETE STOKES, Alaska Support Industry Alliance (ASIA), Anchorage,
Alaska, supported HJR 4. He works as a petroleum engineer with
Petrotechnical Resources of Alaska, is a board member of the
ASIA, and also serves on the Oil and Gas Competitiveness Review
Board. He said Alaska became the 49th state and could sustain an
economy only through resource development. It is important for
Alaska to share in the OCS royalty revenue as the state is the
entity that provides infrastructure and social fabric (schools
and other state government spending) that support the OCS
development.
MR. STOKES said similar to the OCS Gulf of Mexico, Arctic OCS
development is important for the nation's energy security and
the host state should receive benefit in support of this effort.
This is currently the practice in the Gulf of Mexico and should
be adopted for the Arctic OCS as the state gives the necessary
support for developing oil and gas in the harsh Arctic offshore
environment. An additional precedent is the sharing with Alaska
of 90 percent of federal onshore royalties. Since the federal
government has put many onshore areas, such as the NPR-A off
limits to development and continues to prevent exploration and
development in ANWR, it is even more important for the state to
receive benefit from federal OCS development.
CHAIR GIESSEL thanked Mr. Stokes and finding no further comments
said she would keep public testimony open and hold HJR 4 in
committee.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HJR 4 Sponsor Statement.pdf |
SRES 3/16/2015 3:30:00 PM |
HJR 4 |
| HJR 4A.pdf |
SRES 3/16/2015 3:30:00 PM |
HJR 4 |
| HJR 4 Fiscal Note -1-1-030215-RES-N.pdf |
SRES 3/16/2015 3:30:00 PM |
HJR 4 |
| Resume-Attorney General - Richards.pdf |
SRES 3/16/2015 3:30:00 PM |