03/08/1995 03:45 PM Senate RES

 SRES 3/8/95                                                                   
          SB 113 REDUCTION IN ROYALTY FOR CERTAIN USES                        
                                                                            
 MR. CHENOWETH said that SB 113 is also the approach of reducing               
 royalty that is payable.  The changes are divided between coal and            
 oil and gas.  The royalty is reduced if the oil or gas is                     
 developed, produced, and sold to a project that qualifies under               
 (dd) of this section which sets out what a qualifying project is.             
 For example, a project that is intended to make the oil and gas               
 available as an energy resource for use by the public.  It is                 
 supposed to be one that is, in a sense, remote, that is, not tied             
 to the existing pipeline system and that is owned/operated by a               
 municipality or village.                                                      
                                                                               
 There is the same kind of adjustment, as with exploration                     
 licensing, for materials from a well that you obtained as a lessee,           
 because you were the holder of a successful exploration license.              
 MR. CHENOWETH said that Sections 2 and 3 adjust the royalty payable           
 for coal.                                                                     
 SRES 3/8/95                                                                   
              SB 114 HIGH COST MARGINAL OIL WELLS                             
                                                                              
 MR. CHENOWETH said that SB 114 is legislation on high cost marginal           
 oil wells.  It turns over to the Alaska Oil and Gas Conservation              
 Commission (AOGCC) the ability to determine that a producing oil              
 well is, in fact, a high cost marginal oil well and adjusts the               
 royalty as set out.                                                           
                                                                               
 SENATOR LEMAN thanked him very much and said he would schedule                
 hearings on these bills next week.