Legislature(2011 - 2012)BUTROVICH 205
03/30/2012 03:30 PM Senate RESOURCES
| Audio | Topic |
|---|---|
| Start | |
| SB145 | |
| SB215 | |
| SB219 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | SB 145 | TELECONFERENCED | |
| += | SB 215 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| = | SB 219 | ||
SB 219-DISPOSALS OF STATE RESOURCES
4:32:32 PM
CO-CHAIR WAGONER called the meeting back to order and announced
consideration of SB 219, version A, recounting that he had
objected for discussion purposes. Finding no one to testify, he
closed public testimony. He asked if any committee members
wanted a briefing as to the development of SB 219.
SENATOR FRENCH asked what this statute does to temporary water
use authorizations and if they were first put into statute in
2001.
4:34:25 PM
WYN MENEFEE, Chief of Operations, Division of Mining, Land and
Water, Department of Natural Resources (DNR), Anchorage, AK,
said he but didn't know the date they were put in statute.
SENATOR FRENCH said the idea then was instead of having
permanent water rights assigned to someone, an individual would
just get a temporary permit. His concern was that the temporary
permits were getting to be permanent since they are extended for
five years. He asked how many were out there.
MR. MENEFEE replied 672 temporary water use permits were
administered in 2011. He explained that the reason they aren't
permanent is because a permanent water right is actually a
property right that goes with the property regardless of
ownership. A temporary water use authorization is not a right to
water; it's the management of that water. So, it can be changed,
revoked, additional conditions can be added like reduction in
water quantities or use periods can be suspended to protect the
public interest. None of that can be done with a water right
without the consent of the water right appropriator or the
abandonment of that water use. Therefore, a temporary water use
permit is designed to allow the Division of Mining, Land and
Water to manage the water use in Alaska, whereas the water right
is more of a process where the company or an individual can
protect their water source from others from adversely affecting
their use. They have different purposes.
4:37:00 PM
SENATOR FRENCH said maybe it was an issue of semantics, but it
seemed funny to have something they called a "temporary water
use authorization" that one can get for as long as five years
and then get a reauthorization for another five years. Now it's
been in existence for 10 or more years and its being called
temporary. It doesn't seem temporary.
MR. MENEFEE replied that each five-year renewal is a new
authorization even if they call it a renewal, and the state can
decide to issue it for only one year if there are other needs
for the water.
SENATOR FRENCH recalled that these authorizations were being
issued without the same level of public notice as other permits.
MR. MENEFEE answered that was correct and explained that because
it is actually a property right, they go through a more
formalized public notice procedure. The temporary water
authorizations, although they don't do a "public notice" in the
sense of going out and advertising in newspapers, are on a
public website that shows all the temporary water use
authorizations that have been issued. People can look at the
site which allows querying anywhere in Alaska by meridian,
township and range to find out if an authorization had been
issued.
SENATOR FRENCH asked if the website would convey when the
authorization expires and when the opportunity to provide input
into the renewal would ripen.
4:40:54 PM
MR. MENEFEE replied that he would have to research that.
SENATOR WIELECHOWSKI asked the standard of review on appeal in
one of these cases.
CAMERON LEONARD, Assistant Attorney General, Department of Law
(DOL), Anchorage, AK, said he agreed that most of these cases
would use an abusive discretion standard, but the standard of
review the court uses depends upon how the appeal is framed. So,
if for example, someone were claiming that the commissioner had
misapplied either the regulations or the statutes, then a less
deferential standard would apply. For a typical case of someone
objecting to the renewal of a temporary water use authorization,
he would argue on behalf of DNR that the standard of review
should be abusive discretion.
SENATOR WIELECHOWSKI asked if it's hard to overcome an abusive
discretion standard.
MR. LEONARD answered yes; it's probably the most deferential of
the various standards the courts use. He explained that in
general, the court will make sure the agency has taken a hard
look at the relevant factors and no obvious mistake in judgment
had occurred.
SENATOR FRENCH asked how often that happens.
MR. LEONARD replied that he found only one reported decision
brought by Greenpeace against a temporary water use
authorization for building an ice road on North Slope; it was a
procedural challenge to the way DNR's appeal procedures worked.
Because it was a question of law, the standard of review was
substitution of judgment, which means the judge doesn't defer to
DNR at all on how the law should be interpreted.
CO-CHAIR PASKVAN asked if there is a concern as to any capacity
for water volumes that will be needed on the North Slope at this
time.
MR. MENEFEE answered that his research revealed that Pioneer
wanted to receive some water from the ConocoPhillips
desalination facility. When ConocoPhillips' needs are low they
could provide more water to Pioneer, but if they need the whole
amount, then they are not required to supply that water to
Pioneer as per an agreement between companies. The solution is
either ConocoPhillips decides to expand their facility or
Pioneer builds their own.
Will there be water shortages? He said they don't know of any
places where water shortage would prevent development. However,
they recognized there are certain areas of the North Slope that
have less water in the surface systems and until they drill,
they aren't sure whether the subsurface systems have any. But
development companies regularly incorporate water use into their
planning for the North Slope, because it is in their best
interest to seek and obtain a water right versus a temporary
water use authorization. At this point, it isn't known if a
situation would actually restrict development.
4:46:10 PM
CO-CHAIR PASKVAN asked if there is a limitation at this time on
any company's capacity to obtain water rights from the State of
Alaska and if temporary water use permits can be used to force
people into bad competitive circumstances.
MR. LEONARD said that was a challenging question and what he
could tell him was that there are instances where because of a
lake's depth, the company could only pull so much from water
from it and had to maybe go to a different lake or stream to
pull that water. That influences development, but at this point
it appears that at any time they have had a reduction in the
amount of water that someone could take from an area, another
way was found to address the issue although it might mean that
it's more expensive. But at this point, he was not aware of
anything that had prevented development or had adversely hurt an
independent from coming in because of a water issue.
CO-CHAIR PASKVAN asked if this is a priority for the division,
why the legislation was not introduced until Feb 29, 2012.
4:48:50 PM
JOE BALASH, Deputy Commissioner, Department of Natural Resources
(DNR), Anchorage, AK, replied that the department has had a
backlog from the transition in 2010. The work had largely been
done with the assistance of the legislature in terms of
appropriations to increase staffing in the Division of Mining,
Land and Water. They have taken on the task of maintaining the
workload and at the same time tackling the analysis and the
reconstruction of the system. To manage the land and the water
in the division they undertook an internal review and conducted
a series of public hearings and meetings all across the state
during the late summer and fall to gather input from interested
parties. The information was put together and analyzed about how
to make their processes more efficient. That was "the low
hanging fruit and noncontroversial." That is what is in front of
the committee now. There is also a sentiment that this will be a
process of improvement that will take place over many years.
They are attempting to resolve many things through regulatory
packages that will be put out to public comment.
CO-CHAIR PASKVAN asked if the holder of a temporary water use
permit could sell a portion of it or all of it.
MR. MENEFEE answered that the temporary water use authorization
is not sellable. If, for instance, ConocoPhillips was using a
well instead of a desalination plant and wanted to sell part of
it, they could do that as part of their business plan. The
department doesn't issue a temporary water use authorization or
a water right for using salt water, because there is so much of
it. They can, but they don't.
CO-CHAIR PASKVAN asked if there is a way a company could
improperly use a temporary water use permit and block someone
from access to a water resource on the central North Slope.
4:54:05 PM
MR. MENEFEE replied that is not an issue, because the renewal is
not automatic. The staff reviews and decides. Other things
having demand on the water will be considered before issuing
another temporary water use authorization to the same company
for that use. The authorizations are revocable and can be
changed.
4:55:18 PM
CO-CHAIR PASKVAN remarked that a book by James Michener, named
"Centennial," told how an economic interest focused on all the
areas that had water, because that was going to control tens of
thousands of miles. He wanted to make sure this was not creating
that type of situation where you allow an economic interest to
essentially dominate an entire region by just owning a few
little pinch points.
MR. MENEFEE said temporary water use authorizations will not do
that. But he wouldn't say that water rights couldn't be used
toward that end. You can't diminish a water use right; it's
first come first served.
SENATOR WIELECHOWSKI said they probably will see this play out
on the North Slope at some point, particularly with shale gas,
and asked if the dominant right exist only during the time of
the permit. Does it expire and they have to renew it? Or do they
have a dominant right forever for that water?
MR. MENEFEE clarified that a temporary water use authorization
is not a water right. Water rights are where you get the right
to the water and the first in line gets the dominant right.
Temporary water use authorizations have nothing to do with that;
it is the division deciding to give them water to use for their
intended purpose. So, therefore, if a company chooses to apply
for the water right, 5,000 gallons for instance, if historically
they show they only used 1,000 and don't really need the 5,000,
you could argue to reduce it. But as long as they use the amount
they said they would, that stays with the land in perpetuity
even if it gets sold.
4:59:06 PM
SENATOR WIELECHOWSKI said his dominant concern was they see the
issue of water rights playing out in western states. Alaska is
fortunate because it has a lot of water, but he thought it would
play out on the North Slope because shale oil needs huge amounts
of water. He was very concerned about giving companies what
appears to be de facto permanent right to water use and he
wanted to make sure this bill wasn't doing that, because it
takes away the notice and the opportunity to oppose, and the
standard for appeal is abuse of discretion, which is virtually
impossible to overturn.
MR. MENEFEE explained in order to have a water right you have to
have ownership control of the land. On the North Slope, an oil
and gas lease is the right to the land. As long as that oil and
gas lease stays in place, they have the water rights. If the oil
and gas lease goes away and they don't have it any more, then
the water right does not stay. It disintegrates on the point of
the land ownership control. So, as long as someone has an
ownership interest, then the water right stays perpetual, but
there is a difference between a temporary water use
authorization and a water right, because every five years or
even three years into the permit and someone comes along and
needs to share the water, the division has to make a management
decision at that point in time and there is nothing stopping
them from changing that person's water use.
He said a situation might come up when a company might use all
the existing water and someone else wants to come along and
there is no more water left; a decision would be made somewhere
along the line to share the water or make the other company haul
water from farther away.
MR. BALASH sought to assure him about the department's plans for
managing water on the central North Slope saying they requested
a geo-hydrologist position for the Division of Geologic
Geophysical Surveys, because it is critically needed to
understand the water resource there, particularly as the state
is on the leading edge of shale development. He used an example
of work the division had done from the MatSu area where a number
of businesses, community wells and home owners rely on shallow
water wells to provide their water supply. As that population
has mushroomed over the last couple of decades, it's got to be a
bigger and bigger deal. The division has its arms around it now
and has a good understanding of where the demand and production
are - and they want a similar understanding on the central North
Slope.
5:04:15 PM
CO-CHAIR PASKVAN repeated his concern with water rights issues
and creating pinch points.
CO-CHAIR WAGONER commented that he came from a state where water
rights are treated like mineral rights; they have battles and
wars and lawsuits. He then concluded saying amendments needed to
be in his office by 9 am on Monday and that other amendments
would conform this bill to HB 361. He thanked the presenters.
[SB 219 was held in committee.]
| Document Name | Date/Time | Subjects |
|---|---|---|
| SB145CS(RES)-DNR-DOG-03-29-12.pdf |
SRES 3/30/2012 3:30:00 PM |
SB 145 |
| SB145CS(RES)-DOR-TAX-03-29-12.pdf |
SRES 3/30/2012 3:30:00 PM |
SB 145 |