02/02/2015 01:00 PM House RESOURCES

                 HJR  9-ENDORSING ANWR LEASING                                                                              
                                                                                                                                
1:46:55 PM                                                                                                                    
                                                                                                                                
VICE CHAIR  HAWKER announced that  the next order of  business is                                                               
HOUSE JOINT RESOLUTION  NO. 9, Urging the  United States Congress                                                               
to  pass legislation  to open  the  coastal plain  of the  Arctic                                                               
National Wildlife Refuge  to oil and gas  development; urging the                                                               
United  States  Department  of  the  Interior  to  recognize  the                                                               
private property rights of owners of  land in and adjacent to the                                                               
Arctic  National  Wildlife  Refuge;   relating  to  oil  and  gas                                                               
exploration,   development,   production,  and   royalties;   and                                                               
relating to renewable and alternative energy technologies.                                                                      
                                                                                                                                
CO-CHAIR  TALERICO,  sponsor, stated  that  Joshua  Banks of  his                                                               
legislative staff would introduce HJR 9.                                                                                        
                                                                                                                                
1:48:34 PM                                                                                                                    
                                                                                                                                
JOSHUA BANKS,  Staff, Representative Dave Talerico,  Alaska State                                                               
Legislature,  on  behalf  of  Representative  Talerico,  sponsor,                                                               
introduced HJR 9.   He said that when Congress  passed the [1980]                                                               
Alaska  National  Interest  Lands Conservation  Act  (ANILCA),  a                                                               
small section of land within  the Arctic National Wildlife Refuge                                                               
was  set aside  for future  resource development.   Known  as the                                                               
"1002 study area", this section makes  up 1.5 million acres, or 8                                                               
percent, of  the refuge.   Under ANILCA,  Congress must  give its                                                               
approval for  oil and  gas development  in the  1002 area  or for                                                               
designating  it  as Wilderness.    Though  there have  been  many                                                               
attempts to receive congressional  approval for drilling the 1002                                                               
area,  none have  been successful.   Therefore,  HJR 9  serves as                                                               
continued encouragement  for Congress  to approve  this drilling.                                                               
There  are multiple  reasons for  supporting  development of  the                                                               
1002  area.   First, the  land within  the 1002  area that  would                                                               
likely be developed for oil makes  up 1 percent of the 1002 study                                                               
area  and  0.08  percent  of the  entire  refuge,  leaving  99.92                                                               
percent of the  refuge free from oil  development.  Additionally,                                                               
with today's  drilling technology,  the footprint for  drill pads                                                               
continues to be  even smaller and the volume of  oil that one pad                                                               
can get from the ground continues to increase.                                                                                  
                                                                                                                                
1:50:25 PM                                                                                                                    
                                                                                                                                
MR. BANKS  continued, stating that  even though oil  drilling has                                                               
been ongoing in Prudhoe Bay  for decades where the Central Arctic                                                               
Caribou Herd  migrates, the herd's population  has increased from                                                               
5,000 to 67,000  caribou.  Thus, despite intense  drilling on the                                                               
North  Slope, Alaska's  caribou  herds have  not been  negatively                                                               
affected and  drilling can continue  to happen in  Alaska without                                                               
hurting caribou and without harming Native subsistence rights.                                                                  
                                                                                                                                
MR. BANKS  stated that as  oil flow in the  Trans-Alaska Pipeline                                                               
System  (TAPS)  continues  to  decline  down  to  nearly  500,000                                                               
barrels per  day, the  need for  new oil  continues to  be great.                                                               
Opening  the  Arctic  National Wildlife  Refuge  would  allow  an                                                               
estimated 700,000  barrels per  day of  oil at  the peak  to flow                                                               
down  TAPS  and   increase  the  life  of   this  valuable  piece                                                               
infrastructure.   According  to  the 2002  McDowell Group  report                                                               
(provided  in the  committee  packet), even  at  $24 per  barrel,                                                               
Alaska could  receive up  to $500 million  per year  in royalties                                                               
from the Alaska National Wildlife Refuge.                                                                                       
                                                                                                                                
MR. BANKS  noted that HJR 9  is very similar to  resolutions that                                                               
have  been passed  by  the  legislature, with  only  a few  minor                                                               
changes  from the  resolution passed  two years  ago in  the 28th                                                               
Alaska State  Legislature.   Primary changes  consist of  who the                                                               
resolution is  addressed to, including U.S.  Senator Dan Sullivan                                                               
and specifying that  U.S. Senator Lisa Murkowski is  chair of the                                                               
U.S.  Senate Energy  and Natural  Resources  Committee.   Another                                                               
change is  on page  2, line  13, where instead  of a  generic gas                                                               
pipeline, the  Alaska liquefied natural  gas project  begun under                                                               
Senate Bill 138  is specifically named.  Also added  is the daily                                                               
oil flow  of up to 700,000  barrels per day that  could come from                                                               
the Alaska  National Wildlife Refuge,  which is an  estimate done                                                               
by the U.S.  Department of Energy.  Lastly, two  "be it resolved"                                                               
clauses in  the past resolution were  very similar, so HJR  9 has                                                               
combined those into one clause.                                                                                                 
                                                                                                                                
1:53:08 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE JOSEPHSON observed that  the last resolve [page 4,                                                               
lines  16-20]  talks  about  the  90/10  split  and  the  state's                                                               
resistance to  suffering a coercion from  the federal government.                                                               
He said  his understanding has  always been that the  90/10 split                                                               
refers  to state  land  and  that is  why  everyone applauds  the                                                               
Department of  Natural Resources (DNR) for  selecting the Prudhoe                                                               
Bay  area for  state  ownership  in the  late  1960s.   He  asked                                                               
whether it  is meant that the  state should not accept  less than                                                               
that on  federal land even  though the statehood  compact doesn't                                                               
suggest that the state is entitled to more than 10 percent.                                                                     
                                                                                                                                
MR. BANKS replied that his  understanding of the Statehood Act is                                                               
that the state  receives 90 percent of royalties  and he believes                                                               
that is what is being encouraged in the resolution.                                                                             
                                                                                                                                
VICE CHAIR  HAWKER inquired whether Representative  Josephson has                                                               
specific language in HJR 9 that he is looking at.                                                                               
                                                                                                                                
REPRESENTATIVE  JOSEPHSON responded  that  he is  looking at  the                                                               
language on page 4, lines 18-19.                                                                                                
                                                                                                                                
1:54:58 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  JOSEPHSON  then  drew attention  to  the  whereas                                                               
clause on page  2, line 26.  After re-reading  the clause he said                                                               
he had no question.                                                                                                             
                                                                                                                                
1:55:54 PM                                                                                                                    
                                                                                                                                
VICE CHAIR HAWKER related the  history regarding the issue of the                                                               
state  being forced  to  take less  than the  90  percent it  was                                                               
provided  under the  Statehood Act.    He explained  that at  one                                                               
point in time  there was talk of a 50/50  split between the state                                                               
and the federal  government [in return for opening  the 1002 area                                                               
to  development],  rather  than  the 90/10  split  the  state  is                                                               
entitled to, as a way to  move a transaction forward.  Thus, that                                                               
provision in HJR 9 is looking  at an historic event that was once                                                               
suggested.                                                                                                                      
                                                                                                                                
REPRESENTATIVE  SEATON  clarified  that  the 90/10  split  is  on                                                               
federal land,  not on state  land.   Other than on  federal land,                                                               
the state gets 100 percent of the royalty.                                                                                      
                                                                                                                                
VICE  CHAIR HAWKER  further  clarified that  that  is on  federal                                                               
lands within the state of Alaska.                                                                                               
                                                                                                                                
1:57:46 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE TARR drew attention to  page 2, [lines 6-7], which                                                               
state,  "our  nation's  dependency  on oil  produced  by  hostile                                                               
foreign  nations".   She urged  care with  that language  because                                                               
Alaska's number one  trading partner is Canada and  with whom the                                                               
state has  a great relationship.   Also, she continued,  the U.S.                                                               
will achieve  energy independence  this year  for the  first time                                                               
and that is also the outlook for the future.                                                                                    
                                                                                                                                
1:58:27 PM                                                                                                                    
                                                                                                                                
VICE CHAIR  HAWKER opened public  testimony on HJR 9,  but closed                                                               
it after ascertaining no one wished to testify.                                                                                 
                                                                                                                                
1:58:52 PM                                                                                                                    
                                                                                                                                
VICE CHAIR  HAWKER pointed  out that HJR  9 already  includes the                                                               
provision to  distribute copies to  all members of Congress.   He                                                               
further noted there is no fiscal note associated with HJR 9.                                                                    
                                                                                                                                
REPRESENTATIVE JOHNSON said that  during consideration of HJR 10,                                                               
he observed a statement that  only 250 people visited the Coastal                                                               
Plain on a  yearly basis.  It  is pointed out that  the beauty of                                                               
the Coastal Plain  will be ruined, he added, but  only 250 people                                                               
is not an onslaught of tourism.                                                                                                 
                                                                                                                                
VICE CHAIR HAWKER  noted that there is only one  small village in                                                               
the  Coastal Plain  designated as  the  Arctic National  Wildlife                                                               
Refuge.   He said that  that village  probably does not  have the                                                               
capacity to take more than one or  two people at a time, so it is                                                               
not a  tourist mecca.  It  is basically a saturated  sponge and a                                                               
breeding ground for mosquitoes.                                                                                                 
                                                                                                                                
2:01:06 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE OLSON moved to report  HJR 9 out of committee with                                                               
individual  recommendations  [and  the accompanying  zero  fiscal                                                               
note].   There being no  objection, HJR  9 was reported  from the                                                               
House Resources Standing Committee.