Legislature(1993 - 1994)
03/21/1994 05:00 PM House O&G
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
SB 322 - DELAYS OF OIL AND GAS LEASE SALES Number 009 JERRY GALLAGHER, DIRECTOR, DIVISION OF MINING, DEPARTMENT OF NATURAL RESOURCES (DNR), stated CSSB 322 has exactly the same language as HB 515 with regard to the sections that set out to amend Title 38. He referred to AS 38.05.180(c) and said it currently requires oil and gas lease sales to be listed on the five year oil and gas leasing calendar for two years before the sale can be held. He said AS 38.05.180(c) also requires the sale to be held within 90 days of the quarter that it is scheduled. He stated that SB 322 eliminates the language that requires the sale to be held within 90 days of the quarter it was scheduled. He said in many oil and gas lease sales, the public asks for additional time to comment. He stated DNR's ability to grant the additional comment period is constrained by AS 38.05.180(c). He stated if DNR goes over the 90 day limit then the sale falls off the calendar and it has to go through the five year calendar again. He said AS 38.05.180(c) limits DNR's ability to allow additional public comment. He said in those cases where lease sales are challenged in court, even if the state prevails, if the sale is beyond the 90th day of the quarter, the state would have to go through the process over again. He said DNR believed that eliminating AS 38.05.180(c) caused DNR no harm and gave them greater flexibility in dealing with the public and the courts. He stated DNR supported SB 322. Number 038 REPRESENTATIVE GARY DAVIS asked for the original intent of AS 38.05.180(c). Number 040 MR. GALLAGHER stated there was a concern in the late 1970s that a DNR commissioner would unilaterally and arbitrarily delay oil and gas lease sales. He said the intent of the language was not to allow any delay in leasing. He assured the committee that the scenario never existed and it was not likely to happen in the future. He said public pressure required a reasonable approach to oil and gas leasing. He said AS 38.05.180(c) constrains DNR's ability to be flexible for public comment and causes a lot of problems. Number 053 REPRESENTATIVE JOE SITTON asked what would keep a DNR commissioner from ignoring AS 38.05.180(c). MR. GALLAGHER stated legally there would be nothing to prevent the commissioner from ignoring AS 38.05.180(c). He said in reality, for anyone who operates in the public forum, the pressures from both sides generally push one to the middle ground. He stated maintaining the state's oil and gas lease program on an orderly schedule was something that he was hopeful and confident that every commissioner could do. He said he thought that the statute as written does more harm than good. Number 063 REPRESENTATIVE SITTON asked Mr. Gallagher if the legislature should put into place a mechanism that would prevent a commissioner from ignoring AS 38.05.180(c). MR. GALLAGHER stated that delaying oil and gas lease sales did not seem to be a problem from DNR's perspective. Number 073 REPRESENTATIVE DAVIS moved CSSB 322(Fin) out of committee with individual recommendations and accompanying fiscal note. Number 075 REPRESENTATIVE PETE KOTT concurred and said when the legislature is able to repeal laws it is doing something that the public will find acceptable. ADJOURNMENT Number 078 CHAIRMAN GREEN adjourned the meeting at 5:12 p.m.
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