02/06/1998 03:30 PM Senate RES

            SCR 20 - STATE AREAWIDE LEASING PROGRAM                            
                                                                               
SENATOR DRUE PEARCE, representing Area F in Anchorage, stated she              
sponsored SCR 20 at the request of the Support Industry Alliance.              
The Nineteenth Legislature unanimously passed a bill in 1996 that              
allows areawide leasing.  The first areawide lease will occur in               
Cook Inlet; the second will occur on the North Slope.  Areawide                
leasing is meeting with some resistance and is being legally                   
challenged.  The Alliance has asked the Twentieth Legislature to               
voice its position on areawide leasing to help fight court                     
challenges to specific areawide lease sales.  SCR 20 voices the                
Legislature's support.                                                         
                                                                               
SENATOR TAYLOR asked if this process utilizes stakeholder meetings.            
SENATOR PEARCE said the first stakeholder event happened in Lease              
Sale 85A which was a specific lease sale.  The Administration then             
convened a stakeholder process for the areawide lease sale in Cook             
Inlet.  She expressed concern that this process has led to specific            
points and areas that opponents to leasing of any sort will use to             
challenge areawide leasing in court.  Senator Pearce said that                 
while the resolution does not speak to the whole stakeholder                   
process, she thought that process is outside of the bounds of the              
statute.                                                                       
                                                                               
SENATOR TAYLOR noted he did not understand where the stakeholder               
process came from because he did not believe it was part of the                
1996 legislation.  SENATOR PEARCE answered it was not and is                   
actually a process that is completely outside of the law.                      
                                                                               
SENATOR TAYLOR said he would not suggest encumbering SCR 20 with               
any controversy about the stakeholder process because he                       
understands the purpose and need for which the resolution was                  
submitted.  He added it is his understanding there is absolutely no            
legal authorization for the stakeholder process and its intended               
effect is to further convolute and delay the process, and provide              
opportunities for additional litigation.  He repeated the                      
stakeholder process is being used to stifle the policy and intent              
of the 1996 Legislature.                                                       
                                                                               
VICE-CHAIR GREEN stated the Legislature needs to be vigilant of                
several issues, not only areawide leasing, because some of the same            
groups use court challenges and other methods to delay progress                
made by other industries.                                                      
                                                                               
Number 96                                                                      
                                                                               
KAREN COWERT, General Manager for the Alaska Support Industry                  
Alliance, read the following statement.                                        
                                                                               
     The Alliance is a statewide trade organization representing               
     businesses that provide products and services to oil and gas              
     companies and activities.  One of the most important issues               
     facing Alaska's oil and gas industry, and thus the economy, is            
     the State's new areawide leasing program.  It would appear                
     that the Legislature agreed, having passed the law creating               
     the program.  In fact, the vote says it all, and in 1996 every            
     single one of Alaska's elected officials, Democrat,                       
     Independent, and Republican, passed HB 388.  As a trade                   
     organization consisting of over 300 businesses that supplies              
     products and service to oil and gas companies and activities,             
     and representing 25,000 employees, the Alliance was extremely             
     pleased to see the law pass in such a unified manner.                     
     Unfortunately, there are those that are choosing to ignore our            
     State leaders unanimous passage of areawide leasing.  The                 
     opposition claims that they did not have sufficient time to               
     express their opinions on this piece of legislation.  Given               
     the two year time period during which the bill was considered             
     and modified, the Alliance believes there was more than ample             
     time to provide comment at numerous stages.  For this reason              
     the Alliance asks that the Legislature reiterate support for              
     areawide leasing through this resolution.  This reiterization             
     will  assist the Alliance and others in efforts to accurately             
     portray the program and the benefits to be reached by all                 
     Alaskans.                                                                 
                                                                               
     In closing, smart global economy, efficiency in government,               
     business and job opportunities, additional royalty revenue for            
     our permanent fund when the industry is given the opportunity             
     to explore, develop, and produce oil and gas, realizes that               
     areawide simply makes good sense for Alaskans.  Thank you for             
     allowing me the opportunity to support your resolution and I'd            
     be happy to answer or address any concerns or questions you               
     might have of the Alliance.                                               
                                                                               
SENATOR TAYLOR stated he appreciates the fact that the resolution              
was brought on an affirmative basis.  He does not believe any                  
committee member wants to slow its movement, but he felt it would              
be a failure on the part of the committee to discuss the extensive             
amount of background and time spent on HB 388.  As a legislator in             
1996, he recalled that extensive discussion in both houses about               
all aspects of the program occurred.  He repeated his frustration              
that the stakeholder process is totally unauthorized, and has                  
nothing to do with the 1996 legislation.  He questioned who had the            
authority to create the stakeholder process, and what funding                  
source is being used.  He concluded by saying this Administration              
authorized the stakeholder process to intentionally destroy and                
defeat the policy set by the Legislature in SB 308.                            
                                                                               
SENATOR PEARCE clarified that HB 388 was the bill that created                 
areawide leasing; SB 308 was sponsored by her, passed during the               
Eighteenth Legislature and revised the leasing process and                     
established a phase process.  She said Senator Taylor was speaking             
to the fact that the stakeholder process adds something that is not            
in the leasing process.  She said, in her opinion, one of the                  
reasons the stakeholder process is being used is that it is a back             
door attempt to eliminate phasing.                                             
                                                                               
SENATOR TAYLOR stated the legislative intent of SB 308 was very                
clear.                                                                         
                                                                               
Number 175                                                                     
                                                                               
SENATOR TORGERSON said he supported the initial process for Lease              
Sale 85.  During that process there was a lot of debate.  He                   
explained that fishermen opposed the lease sale because drilling               
would occur in the fishing corridor during fishing season.  Fishing            
would be restricted within a geographical boundary, with heavy                 
fines imposed for fishing outside of the restricted area.  During              
that process, a decision was made to not drill in that corridor                
during the fishing season.   He commented however, that often the              
same arguments were repeatedly used for other aspects of the lease             
by people who object to anything.  He said that is where he thinks             
the stakeholder process has gotten out of whack.                               
                                                                               
SENATOR TORGERSON moved SCR 20 out of committee with individual                
recommendations and its accompanying zero fiscal note.  There being            
no objection, the motion carried.