04/15/2015 03:30 PM Senate RESOURCES

           SJR 18-SUPPORT SHELL PORT OF SEATTLE LEASE                                                                       
                                                                                                                                
3:41:37 PM                                                                                                                    
CHAIR GIESSEL announced consideration of SJR 18.                                                                                
                                                                                                                                
KARI NORE,  staff to Senator  Giessel, Alaska  State Legislature,                                                               
Juneau, Alaska, explained  SJR 18 for the sponsor.  She said this                                                               
resolution  supports  the  Royal  Dutch  Shell  Port  of  Seattle                                                               
leases.  It   also  urges  the   State  of  Washington   to  stop                                                               
interfering with  Alaska's economic development,  especially when                                                               
it comes to  developing the oil and gas deposits  in the Beaufort                                                               
and Chuckchi Seas and the Alaska Arctic.                                                                                        
                                                                                                                                
She said this  resolution also offers Seward  and/or Dutch Harbor                                                               
as  possible  ports for  Royal  Dutch  Shell  in the  event  that                                                               
Seattle  and  the  State  of Washington  move  forward  with  the                                                               
termination of their current leases.                                                                                            
                                                                                                                                
SENATOR STEDMAN said Shell had  been looking at several ports and                                                               
that Dutch  Harbor and Seward are  far from the supply  chain. He                                                               
was  wondering why  those were  picked  from the  whole gamut  of                                                               
choices they have in Alaska.                                                                                                    
                                                                                                                                
CHAIR GIESSEL  replied that  Dutch Harbor  is an  actual location                                                               
where Shell has harbored their  vessels before and they have some                                                               
facilities set  up for them  there; Seward  is in the  process of                                                               
developing a harbor.  Ketchikan is an option and  she wasn't sure                                                               
that Whittier could accommodate the drilling vessels.                                                                           
                                                                                                                                
SENATOR STEDMAN  said Sitka has  a dock facility that  is capable                                                               
of  accommodating Panamax-sized  ships.  It appears  that no  one                                                               
port  will have  the  capacity to  facilitate  offshore and  that                                                               
Alaska  will  end  up  with  multiple  ports.  Seattle  is  being                                                               
extremely rude and Alaska would like to get Shell's business.                                                                   
                                                                                                                                
SENATOR  STOLTZE   said  Seward  has   a  rich  history   in  the                                                               
development  of Alaska  and asked  if they  had received  support                                                               
from the City  of Seward for economic development  because of the                                                               
National Park issue and politics  involved in Seward. He asked if                                                               
they  had  received any  support  from  the  City of  Seward  for                                                               
economic  development and  bringing something  as evil  as fossil                                                               
fuels into its port.                                                                                                            
                                                                                                                                
CHAIR  GIESSEL  responded,  as the  immediate  past  senator  for                                                               
Seward,  that Seward  was  the  home port  for  at  least one  of                                                               
Shell's vessels and  is quite open to  development. An industrial                                                               
harbor is being developed across the bay from the city.                                                                         
                                                                                                                                
3:46:40 PM                                                                                                                    
SENATOR  STEDMAN  moved  conceptual   Amendment  1  to  add  "has                                                               
available  potential   home  ports   at  Dutch   Harbor,  Seward,                                                               
Ketchikan, Sitka, and  anywhere in Prince William  Sound" on page                                                               
3, line  13, to  leave the  all the  options open  for companies.                                                               
There were no objections and conceptual Amendment 1 was adopted.                                                                
                                                                                                                                
3:47:42 PM                                                                                                                    
CHAIR GIESSEL opened public testimony on SJR 18.                                                                                
                                                                                                                                
REED   CHRISTENSEN,  Board   Member,   Alaska  Support   Industry                                                               
Alliance,  Anchorage, Alaska,  strongly supported  SJR 18.  He is                                                               
also  the President  of Dowland-Bach  Corporation.   He said  the                                                               
Alaska business  climate is like the  weather: if you like  it or                                                               
not, just wait  five minutes because it will  change. This rugged                                                               
environment and remoteness  is part of the  natural challenges of                                                               
doing business  in Alaska,  but most people  don't realize  it or                                                               
our resiliency and capacity to rise to them.                                                                                    
                                                                                                                                
However, the recent  stance by neighbors in  Washington State and                                                               
others are  much worse than  the flooding of the  Dalton Highway.                                                               
The  Alliance  strongly  supports   this  resolution  and  echoes                                                               
remarks  made by  Mayor Brower  of the  North Slope  in her  open                                                               
letter to  Lieutenant Governor Hensley that  says statements from                                                               
current  leadership in  Washington State  and Seattle  "reflect a                                                               
lack of  basic knowledge  about our region  and are  offensive to                                                               
people who live in America's Arctic."                                                                                           
                                                                                                                                
3:51:23 PM                                                                                                                    
SARAH  ERKMANN, Manager,  External  Affairs, Alaska  Oil and  Gas                                                               
Association  (AOGA), Anchorage,  Alaska,  supported  SJR 18.  She                                                               
said the Arctic Outer Continental  Shelf (OCS) holds enormous oil                                                               
and gas  resources, approximately 27  billion barrels of  oil and                                                               
132 tcf of natural gas.  In comparison, the Trans Alaska Pipeline                                                               
System (TAPS)  has carried just  more than 17 billion  barrels in                                                               
over  30 years.  At one  point, it  carried more  than 2  million                                                               
barrels  of oil  a  day,  but now  it  transports  an average  of                                                               
550,000 barrels  a day. TAPS  has played  a critical link  in the                                                               
nation's energy security and OCS  development in the Beaufort and                                                               
Chukchi Seas could feed into  TAPs and maintain its viability for                                                               
years to come.                                                                                                                  
                                                                                                                                
Additionally, oil  and gas  development in  the Arctic  OCS means                                                               
jobs for Alaskans. Development of  the Chuckchi and Beaufort Seas                                                               
is predicted  to produce an  annual average of 35,000  direct and                                                               
indirect  jobs over  the  next half  century  for Alaska,  alone.                                                               
Those jobs  represent a total  payroll of more than  $70 billion.                                                               
When  it comes  to  the Pacific  Northwest,  Shell's decision  to                                                               
stage its Arctic operation in  Seattle in 2012 poured hundreds of                                                               
millions of  dollars into the  Seattle economy and  employed more                                                               
than 400 people. Seattle stands  to benefit from similar economic                                                               
benefits in  2015. On  a broader scale,  the State  of Washington                                                               
and  City of  Seattle benefit  from the  development of  Alaska's                                                               
resources via  113,000 jobs for  Washington residents  and annual                                                               
business sales to the state of $5 billion.                                                                                      
                                                                                                                                
3:54:11 PM                                                                                                                    
CHAIR  GIESSEL finding  no  further comments  on  SJR 18,  closed                                                               
public testimony.                                                                                                               
                                                                                                                                
SENATOR  STEDMAN  commented  that  Washington State  might  do  a                                                               
refined  products tax  on  exports next  year,  and maybe  Alaska                                                               
might have  a difference of opinion  on that. So, it  goes beyond                                                               
just what they are doing with Shell.                                                                                            
                                                                                                                                
3:55:04 PM                                                                                                                    
SENATOR MICCICHE said he appreciated  SJR 18 very much. The point                                                               
is not lost  of the hypocrisy of some communities;  it seems like                                                               
the more btus  they use per capita the more  they are against oil                                                               
and  gas  development.  He suggested  encouraging  developers  of                                                               
waters off of  Alaska to start a little earlier  on to keep their                                                               
investments  in the  state. The  more that  occurs, the  more our                                                               
infrastructure  will be  capable of  servicing those  vessels and                                                               
assets.                                                                                                                         
                                                                                                                                
SENATOR COGHILL  remarked that one  of the things that  gets lost                                                               
by many  people who live in  Seattle is that Alaska  is trying to                                                               
build  an infrastructure  for  power here.  They  have lived  for                                                               
almost a century with hydro  projects put together by the federal                                                               
government and run by the Army  Corps of Engineers that has given                                                               
them 4-cent  power that they  lean on,  and they are  quite often                                                               
accusing Alaskans  of leaning on  the federal  government. Boeing                                                               
would not  have moved to Seattle  if it hadn't been  for low cost                                                               
power that was created a century ago.                                                                                           
                                                                                                                                
SENATOR STEDMAN  added that  it goes beyond  the western  side of                                                               
the State of Washington; "it goes  into the eastern side when you                                                               
look at damming of rivers  for hydro-generation and the farm belt                                                               
that sprang  up once they had  the ability to water  the desert."                                                               
In the  event legislators ever go  down that road and  mention it                                                               
formally to  their legislature,  he would like  to use  a broader                                                               
brush  and  remind them  of  development  on  both sides  of  the                                                               
mountains.                                                                                                                      
                                                                                                                                
SENATOR  COSTELLO  moved  to  report SJR  18,  as  amended,  from                                                               
committee  with individual  recommendations  and attached  fiscal                                                               
note(s). There were no objections  and CSSJR 18(RES) was reported                                                               
from the Senate Resources Standing Committee.