03/22/1993 05:00 PM House O&G

  SB 134:  CREDITS AGAINST PURCHASE OF ROYALTY OIL                             
                                                                               
  Number 039                                                                   
                                                                               
  MR. EASON stated that it is up to the Commissioner to make a                 
  determination each time it is in the state's interest to                     
  fund or participate in a project.  He said, "Under SB 134                    
  the proponents of that legislation have presented a bill                     
  that truly is nondiscretionary in finding what is a clear                    
  and convincing finding of the project that they propose to                   
  build with state money.  Under the EIC (Exploration                          
  Incentive Credit), we identify the ones we want to                           
  participate in, set the limits, and the amount of money that                 
  can be credited.  Under SB 134 there is no such control                      
  because there is potential to create new disputes at any                     
  time on the instate refiners' part.  The EIC's encourage                     
  competition and they are available to all lessees in a lease                 
  sale.  Senate Bill 134 we believe, is a very anti-                           
  competitive bill and will tilt the competitive balance.  The                 
  EIC's represent no forgiveness, they don't establish                         
  precedent of fighting the state for years and years in court                 
  only to be found wrong and not have to pay.  Everyone who                    
  equally wants to participate in the program and they do it                   
  without having to renegotiate the contract position."                        
                                                                               
  Number 139                                                                   
                                                                               
  REPRESENTATIVE G. DAVIS asked if he saw any amendments that                  
  would make SB 134 amendable or agreeable by the                              
  administration.                                                              
                                                                               
  Number 149                                                                   
                                                                               
  MR. EASON stated that he personally does not think so, but                   
  he has not talked with the administration on that specific                   
  point.                                                                       
                                                                               
  Number 163                                                                   
                                                                               
  LARRY KIMBALL, CHAIR FOR ALASKA FEDERATION OF NATIVES, felt                  
  the state needs to look at what is considered to be its                      
  interest in oil and gas and that interest has changed.  He                   
  said, "There are a series of court cases in which the state                  
  has determined that the state is to pick up lands throughout                 
  the state.  To say the state's interest may be diluted by                    
  remote areas is misleading, it may be true, or more true, if                 
  we were looking at the old state land selections."  He                       
  stated they do not have any selections that do not have a                    
  major encroachment by the state's interest.                                  
                                                                               
  Number 206                                                                   
                                                                               
  ADJOURNMENT                                                                  
                                                                               
  CHAIRMAN GREEN adjourned meeting at 6:50 p.m.