Legislature(2023 - 2024)ADAMS 519
05/16/2023 10:30 AM House FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| SB48 | |
| SB140 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
| += | SB 48 | TELECONFERENCED | |
| += | SB 140 | TELECONFERENCED | |
CS FOR SENATE BILL NO. 48(FIN)
"An Act relating to the powers and duties of the
Alaska Oil and Gas Conservation Commission;
authorizing the Department of Natural Resources to
lease land for carbon management purposes;
establishing a carbon offset program for state land;
authorizing the sale of carbon offset credits;
authorizing the use of land and water within the
Haines State Forest Resource Management Area for a
carbon offset project; authorizing the undertaking of
carbon offset projects on land in legislatively
designated state forests; relating to oil and gas
lease expenditures; and providing for an effective
date."
12:53:01 PM
Co-Chair Foster noted that one amendment had been received.
Representative Coulombe requested to ask a question to the
department.
Co-Chair Foster asked a representative from the Department
of Natural Resources (DNR) to come to the committee table.
Representative Coulombe was concerned that the carbon
credits had an opportunity to raise the cost of energy in
Alaska. She stated that anytime resource companies were
required to buy something to do business, generally the
cost went downhill. She had heard a lot about energy cost
during the current session. She relayed that her amendment
addressed the concern. She asked how the department and
state would raise revenue without increasing energy costs
for Alaskans.
12:54:45 PM
AT EASE
12:56:04 PM
RECONVENED
Representative Coulombe MOVED to ADOPT Amendment 1, 33-
GS1372\R.2 (Dunmire, 5/15/23) (copy on file):
Page 1, following line 8:
Insert a new bill section to read:
"* Section 1. The uncodified law of the State of
Alaska is amended by adding a new section to read:
LEGISLATIVE INTENT. It is the intent of the
legislature that the carbon offset program be used as
a resource development tool and not cause consumers in
the state to pay higher prices for goods or energy as
a result of the program."
Page 1, line 9:
Delete "Section 1"
Insert "Sec. 2"
Renumber the following bill sections accordingly.
Co-Chair Foster OBJECTED for discussion.
RENA MILLER, SPECIAL ASSISTANT, DEPARTMENT OF NATURAL
RESOURCES, understood the intent behind the amendment and
appreciated the concern. She clarified that the bill did
not require any corporation to buy the credits or implement
an emissions limit that would obligate the business to look
for a means to offset them. She stated it was an increasing
reality of doing business for many corporations where their
customers, shareholders, investors, and/or inherent
internal values were pushing them to make voluntary
emission reduction, net zero type goals. She stated that
purchasing offsets from the market was one avenue the
corporations could take in order to meet the goals. She
relayed it was not the department's intent for the state's
engagement in the carbon market to drive up costs for
Alaskans or anyone else. The department believed the
corporations would seek the offset credits at general
market prices and some valued certain kinds from certain
areas and co-benefits more highly than others. The
department wanted to put out a fair credit that
accomplished the concurrent goals of following through on
its constitutional obligation to maximize the resources of
the state. She detailed that carbon was a replenishable
resource in this context that generated revenue for the
state that concurrently did something positive for the
environment and put something on the market for
corporations to purchase in order to accomplish their
goals. She stated the department appreciated the intent
statement and viewed it as an additional use of resources.
12:59:11 PM
Representative Coulombe spoke to the intent of her
amendment. She shared that she had received numerous emails
about the topic from constituents. She saw the carbon bills
as a tool to help resource development continue in Alaska
more than as a revenue generator. She believed if the
revenue came it would be later. She could not tell
companies what to charge people, but her concern was about
a situation where the state was overburdened with
regulatory cost or was driving revenue and did not pay
attention to the cost to the consumer. She remarked it was
only possible to control what the state did, not what oil
and gas did. She reiterated her view that the carbon bills
were a tool to help industry in Alaska conduct its
business. She stated that it was the "world we live in"
whether a person agreed with ESG [environmental social
governance] and carbon credits. She did not want the oil
and gas companies to begin passing the cost down to the
consumer. She would hate for energy prices to increase and
for no one to understand why.
1:00:55 PM
JOHN BOYLE, COMMISSIONER, DEPARTMENT OF NATURAL RESOURCES,
appreciated the sentiments of the amendment. He stated that
the carbon credit demand was being driven by factors
outside of Alaska. He explained that by implementing a
carbon program in Alaska, the state would be offering
supply for the companies demanding it. He explained that
offering the ability for companies to purchase carbon
credits would be the best way for the state to protect
Alaskans from different price shocks. He elaborated that
the revenues collected from the sale of credits would have
myriad purposes for the legislature to appropriate for the
public good. He mentioned separate legislation related to
carbon sequestration, which could help grow the Permanent
Fund and funds could be redistributed in the form of the
dividend. He continued that it was a mechanism available to
the state to protect and provide incentives for the people
of Alaska based on the policies and regulations of other
jurisdictions and the choices companies were making to
implement carbon neutral policies. He believed "we're"
getting to the heart of the intent behind the amendment,
which was protecting Alaskans "from some of these
policies."
1:02:47 PM
Representative Josephson referenced the commissioner's
statement about wanting to protect Alaskans from some of
these policies. He asked for an explanation of the
statement.
Commissioner Boyle replied that it was perhaps an unartful
statement. He clarified that companies were interested in
achieving net zero targets. Some of it was being driven by
regulation in certain jurisdictions or by corporate
policies to obtain certain environmental standards and
benchmarks influencing companies' behaviors. He believed it
was fair to say that those policies may involve a cost on
their product. For example, if a national airline wanted to
achieve a net zero policy and it did not have the
mechanisms at hand to obtain the goal, it would potentially
look to forest or other carbon based offsets to meet the
goals. As a result, it may have some impact on pricing
charged to consumers through increased ticket cost or other
items. The state did not have the ability to control a
company's pricing mechanism. He explained that if the state
had the [carbon credit] program in place, some of the
consumers who may be paying a higher price based on the
companies' choices would see more public benefit through
increased government spending, the Permanent Fund Dividend,
and other mechanisms.
1:05:12 PM
Representative Josephson addressed the amendment. He
believed it was the mindset of the legislature that the
credit purchasers would be in the Lower 48. He noted that
Commissioner Boyle had sort of suggested the same. He
remarked that the state's own industry may be interested in
purchasing credits. He stated his understanding that the
bill would be used as a resource development tool for
resources helping "our brothers and sisters" in the Lower
48. He added that it was compelled to have no net loss on
biomass. He asked if it was fair to say it was a
conservation bill from Alaskan lands.
Commissioner Boyle agreed.
Representative Stapp opposed the amendment. He thought the
first part of the amendment was relatively unnecessary
where it specified "it is the intent of the legislature
that the carbon offset program be used as a resource
development tool." He believed it was already implicit in
the underlying bill. His primary issue with the amendment
was its second aspect that read "... not cause consumers in
the state to pay higher prices for goods or energy as a
result of the program." He stated the intent language was
arbitrary based on a person's philosophical disposition. On
the one hand, it was possible to argue that there was no
value created in a carbon selling system; therefore, it
drove up consumer costs. On the other hand, environmental
advocates would argue that inaction effectively drove up
consumer costs as well because at some point it would be
necessary to deal with mitigation. He did not believe the
legislature or the department could ever fulfill the intent
language. He reiterated his opposition to Amendment 1.
1:08:38 PM
Representative Coulombe thought it was a valid point to
recognize that the program could increase energy costs,
which was a big deal to Alaskans. She understood the issue
was on the department's radar. She appreciated all of the
hours the department had spent on the topic before the
House Finance Committee. She WITHDREW Amendment 1.
Co-Chair Foster noted there were no additional amendments.
1:09:55 PM
Co-Chair Johnson MOVED to REPORT CSSB 48(FIN) out of
committee with individual recommendations and the
accompanying fiscal notes.
There being NO OBJECTION, it was so ordered.
CSSB 48(FIN) was REPORTED out of committee with eight "do
pass" recommendations and three "no recommendation"
recommendations and with three new fiscal impact notes from
the Department of Natural Resources, one new zero note from
the Department of Commerce, Community and Economic
Development, and one previously published fiscal impact
note: FN7 (CED).
1:10:41 PM
AT EASE
1:14:00 PM
RECONVENED
| Document Name | Date/Time | Subjects |
|---|---|---|
| SB 140 Public Testimony Rec'd by 051623.pdf |
HFIN 5/16/2023 10:30:00 AM |
SB 140 |
| SB 140 Public Testimony Rec'd by 051623 Pkt 2.pdf |
HFIN 5/16/2023 10:30:00 AM |
SB 140 |
| SB 140 HCS-FIN FINAL version w Committee Report.pdf |
HFIN 5/16/2023 10:30:00 AM |
SB 140 |
| SB 140 Public Testimony Pkt.3 .pdf |
HFIN 5/16/2023 10:30:00 AM |
SB 140 |
| SB 140 HCS FIN NEW FN DEED-FP-4-16-23.pdf |
HFIN 5/16/2023 10:30:00 AM |
SB 140 |
| SB 140 HCS FIN NEW FN DEED-PEF-4-16-23.pdf |
HFIN 5/16/2023 10:30:00 AM |
SB 140 |
| SB 140 HCS FIN NEW FN DEED-PT-4-16-23.pdf |
HFIN 5/16/2023 10:30:00 AM |
SB 140 |