Legislature(2015 - 2016)BUTROVICH 205
10/31/2015 09:00 AM Senate RESOURCES
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| Audio | Topic |
|---|---|
| Start | |
| SJR301 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | SJR301 | TELECONFERENCED | |
SJR 301-SUPPORT O&G LEASES ON ARCTIC OCS
8:57:57 AM
CHAIR GIESSEL announced the consideration of SJR 301. She said
this resolution is an expression of the will of the body in the
context of the oil and gas development issue, which is the topic
of the third special session. She solicited a motion to adopt
the proposed committee substitute (CS).
SENATOR COSTELLO moved to adopt CSSJR 301( ), version 29-
LS1164\H, as the working document.
CHAIR GIESSEL objected for purposes of discussion and welcomed
Senator Stoltze to introduce the resolution.
SENATOR BILL STOLTZE, sponsor of SJR 301, stated that the CS
makes three minor changes to clarify the message: 1) language
was added on page 1, line 12, regarding the Arctic Outer
Continental Shelf resource potential that would ensure the long-
term success of the project; 2) language was expanded on page 3,
line 15, to include all local governments in the Arctic region
in a strategic alliance with the state as opposed to only the
North Slope Port Authority; and 3) adds the term "responsibly"
to the final resolve on page 4, line 1, to clarify that efforts
to develop offshore oil and gas in the Arctic Outer Continental
Shelf will be done responsibly.
CHAIR GIESSEL removed her objection. Finding no further
objection, she announced that version H was adopted. She
expressed appreciation that the sponsor included in the bill
packets an October 25, 2015 article from the Petroleum News
about the cancellation of the lease sales by the U.S. Department
of Interior.
9:01:40 AM
SENATOR COSTELLO asked for an expanded explanation of the second
change.
SENATOR STOLTZE explained that the North Slope Borough
recommended the change so that all the Arctic communities would
be part of the strategic alliance with the state as opposed to
only the North Slope Port Authority. He characterized the more
inclusive language as a good idea.
CHAIR GIESSEL opened public testimony.
9:03:04 AM
KARA MORIARTY, President/CEO, Alaska Oil and Gas Association
(AOGA), Anchorage, Alaska, stated that AOGA, the professional
trade association for the industry, appreciates Senator Stoltze
introducing SJR 301 and the committee taking up the matter. She
said the resolution talks about the mega potential of the Outer
Continental Shelf oil and gas resources. She opined that just
because Shell did not have a commercial discovery this last
summer from the one well does not mean that there isn't interest
in the offshore or that the resource is not there. Shell simply
needs the opportunity to do more exploration and the first step
in that process is the leasing program. She said AOGA was very
disappointed that the administration decided to cancel the lease
sales for 2016 and 2017. She described the state leasing program
as better than the federal government's because the state
program is predictable and area-wide. Companies rely on that
predictability and consistency for planning and it's not
available from the federal government, she said.
MS. MORIARTY concluded saying that AOGA appreciates the
legislature officially asking the administration to reconsider
cancelation of the two lease sales, because the resource is
important for Alaskans and to supply the nation's energy needs
for the future.
9:06:06 AM
BARBARA HUFF TUCKNESS, Director, Governmental and Legislative
Relations, Teamsters Local 959, Anchorage, Alaska, testified in
support of SJR 301 on behalf of Teamsters Local 959. She pointed
out that the Outer Continental Shelf is huge in size and will
likely generate an additional 54,000 jobs throughout the
country. Local 959 has enjoyed a good working relationship with
oil and gas companies in Alaska for 40 years and hopes to see
continued growth and expansion to include rural areas as well.
Development in those outer areas will result in growth for
communities, better jobs, and better marketing opportunities.
CHAIR GIESSEL commented that she worked in two North Slope
communities so she knows what those jobs and the economic
development would mean.
SENATOR STEDMAN asked Ms. Moriarty if she knew the rough cost
that Shell expensed for the one well because he understands that
it was the most expensive well that's been drilled anywhere.
MS. MORIARTY reported that since the leases were purchased in
2008, Shell has spent close to $7 billion and has been able to
complete one well. She agreed that when all the costs are
tallied, it is by far the most expensive well ever drilled.
SENATOR STEDMAN said the point in support of the resolution is
that one way to hinder economic development is to drive
regulatory costs so high and a project can't be successful. He
opined that that is one of the game plans for groups that don't
want the Arctic developed. He expressed hope that Shell would do
some cost analysis and come forward to show what it would cost
for permits in the Gulf of Mexico relative to the Arctic. He
expressed hope to make development of the Arctic competitive
without dropping environmental controls.
SENATOR STEDMAN stated the concern that if the U.S. does not
move forward with development of the Chukchi Sea and Beaufort
Sea and there is an environmental issue off Siberia or Norway or
northern Canada, it will be in Alaska's backyard and there won't
be a response system nearby. The Port of Nome development was
put on hold with the cancellation of future lease sales in the
area so the response system for Alaska will be located in the
Gulf of Mexico. That is not prudent.
9:11:22 AM
SENATOR STEDMAN suggested keeping that in mind going forward
because neighbor nations will develop their offshore resources
with or without the U.S. He pointed out that China will most
likely be working in the open pie area north of Alaska's shores
and he'd prefer to rely on American technology and its
regulatory environment than China's.
CHAIR GIESSEL thanked Senator Stedman for the well-stated
comments.
SENATOR COSTELLO asked Ms. Moriarty if the federal government's
recent action to cancel future lease sales in the Chukchi Sea
and Beaufort Sea will affect the Alaska Congressional
delegation's efforts related to the offshore revenue sharing
legislation.
MS. MORIARTY answered she didn't know, but Senator Murkowski's
staff indicated they would continue to push ahead on revenue
sharing because it is a very important component for people who
live in the Arctic. The hope is that a future administration
will support lease sales in that region.
9:14:02 AM
CHAIR GIESSEL closed public testimony.
SENATOR STOLTZE stated that this resolution was undertaken in
this special session because it is relevant, timely and within
the purview of this legislative body. He expressed appreciation
of Governor Walker's forceful reaction when the cancellation was
announced because it forecloses economic opportunity for Alaska
and the nation to benefit from the gas reserves. He concluded
that the resolution enhances the special session and
demonstrates concern about the issue.
CHAIR GIESSEL said the committee appreciates the sponsor
bringing this timely and relevant resolution forward. She noted
the zero fiscal note.
SENATOR COSTELLO moved to report CSSJR 301 from committee with
individual recommendations and attached fiscal note(s).
CHAIR GIESSEL found no objections and announced that CSSJR
301(RES) moves from the Senate Resources Standing Committee.
| Document Name | Date/Time | Subjects |
|---|---|---|
| SJR301H.PDF |
SRES 10/31/2015 9:00:00 AM |
SJR301 |
| SJR 301-Fiscal Note-Version W-10-31-2015.pdf |
SRES 10/31/2015 9:00:00 AM |
SJR301 |
| SJR301-H.PDF |
SRES 10/31/2015 9:00:00 AM |
SJR301 |
| CS for SJR 301 - Explanation of Changes ver H.pdf |
SRES 10/31/2015 9:00:00 AM |
SJR301 |