Legislature(2001 - 2002)
05/03/2002 01:10 PM House RES
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HB 527-MINTO FLATS GAME REFUGE CO-CHAIR MASEK announced that the next order of business would be HOUSE BILL NO. 527, "An Act relating to entry into the Minto Flats State Game Refuge for purposes of exploration and development of oil and gas resources." Number 2224 JENNIFER YUHAS, Staff to Representative Beverly Masek, Alaska State Legislature, presented HB 527 on behalf of the House Resources Standing Committee, sponsor, which Representative Masek co-chairs. Ms. Yuhas said in discussions with the Interior delegation, there were requests that something be produced to better facilitate economic development in the state by allowing for responsible exploration and development of oil and gas resources within the Minto Flats State Game Refuge. Number 2257 REPRESENTATIVE FATE said the bill was heard earlier in the day by the House Special Committee on Oil and Gas, and he mentioned several questions asked at that meeting. He said a proposed Nenana Basin oil and gas preliminary report indicated no possibility whatsoever for either exploration or development [in the Minto Flats Game Refuge]; a subsequent letter went to a private individual, which basically stated the same thing. He said this project involved a company named Andex Resources LLC; in consortium with Doyon, Limited, it is prepared to do the exploration and seismic work required to determine whether there is gas in commercial quantities. He mentioned that [the project] was at risk, and could've been a "huge wound" to the economy in Alaska, the Yukon drainage, and the vicinity around Fairbanks. Representative Fate explained that [at that point] the Interior delegation became active in the pursuit of this [project]. He said in discussions, Commissioner Frank Rue of the Alaska Department of Fish and Game (ADF&G) had [guaranteed] that he would try to mitigate the problems and [clarify] the letters that ADF&G had sent to the Department of Natural Resources (DNR). He mentioned that the letter still left some small doubt about the confusion [surrounding the project]. REPRESENTATIVE FATE said it was felt that a bill such as this would suffice to at least give the indication that exploration and development of the Nenana Basin would go forth, but with the same parameters and guidelines [set forth] to mitigate any problems that might come up relative to the environment. He said there was a good public process, and the people of Minto expressed several concerns regarding trapping and Native allotments, but they also said if those issues could be met successfully, they wanted the gas and were for the project. He said if this is done in a good and sound environmental manner, there's no reason for the project to be impeded. REPRESENTATIVE FATE noted the possibility of a conflict [because Mary Jane Fate is his spouse]. Number 2610 MARY JANE FATE testified. She said she was born and raised in Rampart, which is located on the Yukon River very close to Minto and the Elliott Highway. She said she is in favor of this bill as past CEO [chief executive officer], president, and chairman of the board of directors of Baan o yeel kon [Rampart Village Corporation], an ANCSA [Alaska Native Claims Settlement Act] village corporation; and as a current member on the board of directors; and as chairman of the investment committee. She said due to the location, and because of uses of the river in the summer and [possible] ice transportation for highways [in winter, there could be a 12-month involvement with transporting any affordable energy within the Yukon Basin. She noted that the school and the store had closed, and she said the economy is down, and that the area is not marketable because there is not access by land. Ms. Fate remarked, "We've plotted our R.S. 2477s and we've also gone on record, and the congressional delegations in Washington, D.C., have received money and [the] okay for our highway to connect the Yukon River Highway with the Elliott Highway." MS. FATE said this is why she is speaking for the bill. She said efforts are aggressively proactive in reviving the village of Rampart, and that other interests include affordable energy. She noted that there are many concerns about energy, which she indicated is not affordable. Ms. Fate urged the committee to [pass the bill], which she indicated would benefit the economy and employment in that area. CO-CHAIR MASEK noted that there are many areas of the state in similar situations, and she suggested that bills such as this will help economic development [in those areas]. MS. FATE suggested the road is going to happen, and that the money has "come across the board" thanks to U.S. Senator Ted Stevens. Number 2818 REPRESENTATIVE KERTTULA asked how high the level of activity is for hunting and fishing within the refuge itself. MS. FATE said she was raised on a trap line, and the village of Rampart was used as a source of supplies and education. She noted her involvement in activities such as hunting, fishing, trapping, logging, and berry picking. She indicated residents would gain from the exploration and development of the land, if accessed, and she said several subsidiaries have been set aside and would like to joint venture. She remarked, "Of course, we'll take care of our land; of course, we'll take care of the animals; I don't recall my father, who trapped, ... ever overtrapping, or abusing or misusing the use and occupancy of any of our lands, or other lands." Ms. Fate said there is no federal land in the area that she is speaking of; it is owned by the state, Baan o yeel kon, and Doyon, Limited. Number 2923 JIM DODSON, Executive Vice President, Andex Resources LLC ("Andex"), testified. Mr. Dodson said Andex had applied for an exploration license to explore for natural gas in the Nenana Basin, which is a natural-gas-prone basin. He said although the bill did not originate at Andex's urging, the company is in support. He said the hope is that the bill clarifies that the Nenana Basin is not "wholesale" off-limits to natural gas exploration, and that it puts the Nenana Basin and the Minto Flats State Game Refuge in positions similar to other state game refuges. Mr. Dodson said ADF&G feels its position regarding the Nenana Basin, particularly the Minto Flats State Game Refuge, may have been mischaracterized in a preliminary best-interest finding. This legislation would further clarify what development may occur, subject to the proper permitting, within the Minto Flats State Game Refuge, he said. TAPE 02-43, SIDE B Number 2995 MARK MYERS, Director, Division of Oil and Gas, Department of Natural Resources, testified. In response to a question by Representative Kerttula about oil and gas exploration in other refuges, Mr. Myers affirmed that [legislation relating to] the Susitna Flats [and Goose Bay State] Game Refuge and the Trading Bay State Game Refuge specifically have language similar to that proposed in this bill, and that there are other state game refuges that are basically mute to the point. He said this [legislation] would be consistent with [legislation relating to] the Susitna Flats [and Goose Bay State] Game Refuge and the Trading Bay State Game Refuge. Number 2987 CHIP DENNERLEIN, Director, Division of Habitat and Restoration, Alaska Department of Fish & Game, said he is familiar with both the concentration and commodity of resources; that he had formerly done work with [Cook Inlet Region, Incorporated]; and that he helped develop a natural-gas well in the Kenai National Wildlife Refuge. He explained that the department's concerns are that the Minto Flats State Game Refuge is a particularly important wildlife area that predates the refuge and was recognized as the most important fish and wildlife area in all of the Tanana Basin plan, not only for its production and sensitivity, but because of high public use. MR. DENNERLEIN said that area has the highest harvest of waterfowl in Alaska for subsistence or sport [hunting], and is a very obvious complex of lakes, ponds, and wetlands, which is why it's such a "hotspot." The development of subsurface oil and gas resources is allowed in the game refuge, so long as it's compatible with the fundamental, basic protection of those fish and wildlife resources. He said ADF&G's plan does say this in the regulations, and this bill has been correctly cast as mirroring that. Mr. Dennerlein said the issue in that area is going to be access in the northern area, and that some of the language that came out in the discussion during this process did create the impression that everything north of the river was a "blanket off the table." MR. DENNERLEIN noted that the department had tried to clarify that, and he talked about types of access. He said the first access is for exploration, and the department doesn't foresee any problem with that. He said if oil and gas is found, it is important that there is access for drilling and development pads. He said also very important, in this case, is production - if something is found and produced, can it be [transported out of the area]. So, it's a pipeline issue, he said, and the licensee/operator would want to know that if sufficient quantities of the resource are found, they could get it to market. MR. DENNERLEIN talked about the department's initial comments on the issue, and he said it was expressed that the department wished that there not be development north of the river, which is a very important "public use and sensitive [area]." He said what the department meant to say was that if some of these areas are going to be [included] in the license, the department didn't really mean it as a blanket prohibition; rather, it meant that these [areas] would require some special mitigation. He said there would be some areas which the department would not want surface occupancy. Mr. Dennerlein said the department believes it can work on the ground site by site within this language to meet the dual purposes of the refuge, protect the fish and wildlife, and allow the viable development of this prospect. Number 2810 DAVID SHAW, Conservation Chair, Arctic Audubon Society, explained that the Arctic Audubon Society is committed to the conservation of birds and bird habitats in Interior Alaska. He suggested HB 527 undermines ADF&G's ability to limit exploration in the Minto Flats, and also puts critical bird habitat in the path of oil and gas exploration. He said the Arctic Audubon Society is opposed to this bill because, according to ADF&G, the Minto Flats is one of the highest quality breeding and staging areas for waterfowl in Alaska, and possibly in all of North America. He said Trumpeter swans, which are a prevalent breeder in this region, are believed to be negatively affected by noise and human activity; they are often present in this area until November and arrive early in the spring. MR. SHAW said ADF&G should have authority to designate a "core" area or areas, off-limits to exploration. He suggested that this bill seeks to undermine that authority by creating a new subsection that requires entry into the refuge for exploration and development. The Minto Flats State Game refuge is an important Interior Alaska waterfowl and moose harvest area, he said, that is used frequently by waterfowl hunters, and is also an important area for subsistence and sport moose hunting. Mr. Shaw suggested that winter exploration will result in a loss of critical moose habitat. He said the Arctic Audubon Society supports the use of cleaner fuel as an alternative to oil and coal, but does not believe that the critical habitat in the Nenana Basin should be sacrificed, or that this area, designated as a refuge, should be opened to exploration and development, particularly when it is highly likely that in the near future a gas pipeline will pass through Interior Alaskan communities, tapping into the much richer gas deposits on the North Slope. CO-CHAIR MASEK suggested that 60 percent of Alaska's land is "locked up" in refuges or national parks, and said she thought this bill would not affect a lot of those areas that Mr. Shaw had talked about. REPRESENTATIVE FATE asked Mr. Shaw if he thought that the other three game refuges where oil and gas exploration had been done had sacrificed the fish and game. MR. SHAW clarified that he is trying to imply that danger goes along with any development in these delicate habitats, particularly in the Minto Flats. As a result, much of Alaska is off-limits. However, he suggested few of those areas have the [same] value for wildlife habitat that the Minto Flats has. In response to a comment by Representative Fate, he said it is the risk of sacrifice; the impact of development or what will be found is not known, and what exactly could happen in this area is not understood. Mr. Shaw said it is dangerous to go in with the attitude that it can be done right "when we simply do not know." Number 2602 ROGER SIGLIN testified, suggesting this proposal should have been rejected once it was known the refuge would be the center of development. He asked what this bill would change or accomplish, since existing legislation has already been interpreted to allow oil and gas development, if compatible with refuge purposes. He asked if it is Representative Fate's intent to ensure that concerns that ADF&G, regarding habitat and wildlife populations, not be allowed to preclude development in any part of the refuge where Andex and Doyon, Limited, desire to do so. He said in listening to Mr. Dennerlein's comments and in reading written comments by Commissioner Rue, he thought that objective had already been accomplished. Number 2528 LINDA FEILER testified, saying she finds it outrageous that the government agrees to set aside areas for protection, and then wants to ask the question again of whether "we" want to pollute it or destroy it. She noted that she has been a resident of Alaska for 25 years, and she suggested that the state spends a large amount of time setting aside refuges. She said according to "the dictionary's definition of refuge," that is not what is being done here. MS. FEILER said if these areas are going to be [contaminated] by waste and polluted, why are they being set aside for refuges. She said she knew from her experience, in living on the Kenai Peninsula and in the Anchor Point area, what oil and gas can do to a community. Ms. Feiler suggested there had been pollution in that area from oil for quite a long time. She said if an area that has been set aside as a refuge is going to be opened up [for exploration], "then you're asking us to go through the same thing that we went through" in the Anchor Point area. She asked, "Why do we set aside an area, call it a refuge, and then ask us to come back and then know whether we want to go in there and use it as anything but a refuge?" Number 2437 REPRESENTATIVE FATE said when refuges are formed, sometimes a critical analysis of the mineral substance deposits is not done or it is done and it shows that the [deposits] are noncommercial. He suggested that most of the refuges were not [intended] to deter the development of the subsurface; [the intention], mostly, is to protect the habitat and encourage the lifestyle of the people who use the land. Representative Fate said when these refuges were developed, there was no effort to try to forestall any subsurface development, as long as that development really didn't harm the environment. REPRESENTATIVE FATE, in response to a question from Mr. Siglin, turned attention to a statement from a preliminary finding by the director of DNR, which he read in part: Licensees are advised that the Alaska Department of Natural Resources and the Alaska Department of Fish and Game have joint management authority of the Minto Flats Game Reserve. [The] Alaska Department of Fish and Game has advised the Alaska Department of Natural Resources that they will not approve any facilities, pads, pipelines, or roads within the 277,760-acre core area of the Minto Flats game refuge located north of the Tanana River. REPRESENTATIVE FATE said this was construed to negate any possibility in the core area, where the gas is presumed to lie, and forestalled any possibility of either exploration or development. He said a subsequent letter went to an individual in Fairbanks stating basically the same thing. He said it was at this point that the Interior delegation came into play because of its worries about the development of gas in the Interior of Alaska and the possibility of lowering energy costs to the entire area. He said these letters seemed to indicate there would be no ability for gas exploration or development in the [Minto Flats State] Game Refuge. REPRESENTATIVE FATE said it wasn't a matter of whether there was a duplicate statute; it was a matter of clarification of the statutes, and of these communications by ADF&G. He said this bill clarifies it, so there is no doubt; it doesn't mitigate any requirement to explore or develop outside the parameters of good environmental safety, which is set by all agencies that are concerned with the preservation of the environment. Number 2173 MR. SIGLIN asked Representative Fate if he was saying that oil and gas development should proceed, even if the experts in ADF&G determine that it would have adverse impacts on fish and game that could not be alleviated or mitigated. REPRESENTATIVE FATE, in response, said the law doesn't say that, nor does this [bill] say that. He suggested that it was brought out during a previous House Special Committee on Oil and Gas meeting that there may be areas of complete sensitivity that [exploration] may have to go around. He said there's no effort with this bill or any other piece of legislation to try to circumvent those environmental safeguards. Number 2103 RUDY VETTER testified. Mr. Vetter said he is favor of HB 527. He talked about flat drilling and other [drilling] methods, and he said it his belief that this [project] can be developed. Mr. Vetter said if there is gas, then there's a possibility that there is a gas field there. He talked about the gas pipeline from the North Slope and the possibility of a gas pipeline in the foreseeable future. He said he's worked on the North Slope and watched the development of gas and oil. Mr. Vetter remarked, "Right now, and for the foreseeable future, that's not a gas pipeline; that's a pipe dream, because of the present price of gas ...." He suggested the price of gas could be lowered considerably, and that there would be sufficient development in the Lower 48 to make it uneconomical. Number 2011 BOB SHAVELSON, Executive Director, Cook Inlet Keeper, testified. Mr. Shavelson suggested that this [bill] is [setting] a bad precedent, and that there need to be areas that simply remain dedicated to the purposes for which they were set aside. He talked about flying over and touring through the Kenai National Wildlife Refuge, and he said the U.S. Fish and Wildlife Service has previously found that oil and gas development in that refuge is incompatible with the purposes for which the refuge was established. He said evidence of that can be found in the report A Contaminants Assessment for the Kenai National Wildlife Refuge, which was done by a U.S. Fish and Wildlife Service biologist in 2001. Mr. Shavelson said the report provides historical documentation on a vast number of spills, leaks, explosions, other pollution events, total coverage of roads, pads, pipelines, noise, air pollution, and so forth. MR. SHAVELSON said [the report indicates that it isn't possible] to simultaneously have an area dedicated as important habitat and have heavy industrialized oil and gas development concurrently there. He said he's also had the opportunity to fly over and tour the Susitna [Flats and Goose Bay State Game] Refuge and the Trading Bay State Game Refuge. Mr. Shavelson said while it is not developed to the same extent as the Kenai National Wildlife Refuge, the same issues of habitat fragmentation, because of the breaking up of wetlands can be seen. He said these are only small impacts relative to a large area, but, in fact if fish and wildlife are to be protected, it is his belief that the lines need to be kept defined, and not mixed together. Number 1862 CO-CHAIR MASEK, upon determining no one else wished to testify, closed public testimony. Number 1841 CO-CHAIR MASEK temporarily suspended the hearing on HB 527 to address other items of business. HB 527-MINTO FLATS GAME REFUGE CO-CHAIR MASEK returned attention to HOUSE BILL NO. 527, "An Act relating to entry into the Minto Flats State Game Refuge for purposes of exploration and development of oil and gas resources." Number 2307 REPRESENTATIVE FATE moved to report HB 527 out of committee with individual recommendations and the accompanying zero fiscal notes. There being no objection, HB 527 was reported from the House Resources Standing Committee.
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