Legislature(2001 - 2002)
03/26/2002 09:19 AM Senate FIN
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
CS FOR SENATE BILL NO. 319(RES)
"An Act relating to shallow natural gas leasing; and providing
for an effective date."
This was the first hearing for this bill in the Senate Finance
Committee.
SENATOR JOHN TORGERSON, sponsor of the bill, explained that the
original shallow gas leasing program was established to enable
"exploration and production of shallow gas lease deposits in rural
areas to supply energy" to rural area users. He informed the
Committee the changes proposed in this bill would "evolve the
program into a more robust and viable commercial program that
should benefit all parties." He stated the key elements in the
proposal include such things as the generation of increased revenue
to the State by raising application fees for shallow gas leasing
from $500 to $5,000 thereby keeping the fee more in line with the
actual expense of processing the application; lowering the
Department of Natural Resources administrative costs by instituting
automatically renewable leases and removing "unworkable deadlines"
for issuance of leases; providing better reservoir management;
replacing the 3,000 foot depth requirement with language stating
that some portion of the field must be within 3,000 feet of the
surface; increasing field acreage to allow for a viable leasing
program; removal of the requirement for prospective applicants to
conduct a title search; improving protection for surface land
owners; and implementing a conversion methodology to allow existing
leases to be converted to the new program.
MARK MYERS, Director, Division of Oil and Gas, Department of
Natural Resources testified via teleconference from Anchorage to
voice the Department's support of the bill. He stated these
warranted changes would convert the program into a commercial
program that would provide benefits to the State and landowners.
JOHN TANIGAWA, Special Projects Manager, Evergreen Resources
Corporation, testified via teleconference from Mat-Su in support of
SB 319 as it removes obstacles to exploration activities. He stated
the bill is economically sound, and an "excellent example" of the
State working with industry to benefit government, industry, "but
particularly the public."
KEVIN TABLER, representative, Unocal, testified via teleconference
from Anchorage to voice that Unocal supports the amendments to this
bill. He asserted that the shallow gas-leasing program enhances
access to and development of the State's resources.
CHARLOTTE MACCOY, representative, Teck Cominco Alaska, testified
via teleconference from Anchorage to voice support for this bill.
She stated the proposed amendments address concerns Teck Cominco
has regarding bonding requirements. She alerted the Committee that
private lands might have been inadvertently omitted from proposed
language regarding the depth issue change located on page 4, in
Sections 7 and 8.
Mr. Myers shared with the Committee that the Department recognizes
Teck Cominco's concerns and stated an amendment could address both
of Teck Cominco's concerns.
Co-Chair Kelly asked Mr. Myers to work with Senator Torgerson to
develop amendment language.
The bill was SET ASIDE. [Note: This bill was brought back before
the Committee later in the meeting.]
CS FOR SENATE BILL NO. 319(RES)
"An Act relating to shallow natural gas leasing; and providing
for an effective date."
[This bill was heard earlier in the meeting]
AT EASE 10:33 AM / 10:34 AM
Amendment #1: This amendment deletes "field subject to lease under
AS 38.05.177" and inserts "field, if a part of the field is within
3,000 feet of the surface" on page 4, lines 26-27 and page 5, line
26.
Senator Wilken offered a motion to adopt Amendment #1.
Co-Chair Kelly objected for discussion.
Senator Torgerson explained that Amendment #1 addresses an
oversight in the bill that limits producing gas to "lands leased
from the state." He stated that the adoption of this amendment
would make the language consistent throughout the bill.
Co-Chair Kelly withdrew the objection.
There being no objection, Amendment #1 was ADOPTED.
Senator Leman moved "to report the committee substitute for Senate
Bill 319 Finance from Committee with individual recommendations and
accompanying fiscal note."
There being no objection, CS SB 319 (FIN) was REPORTED from
Committee with a new zero fiscal note, dated 3/22/02 from the
Department of Natural Resources.
AT EASE 10:36 AM / 10:44 AM
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