Legislature(2013 - 2014)BARNES 124

02/27/2013 01:00 PM House RESOURCES


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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
*+ HJR 6 BLM LEGACY OIL WELL CLEAN UP/AWARENESS TELECONFERENCED
Moved Out of Committee
*+ HJR 7 ENDORSING ANWR LEASING TELECONFERENCED
Moved CSHJR 7(RES) Out of Committee
+ Bills Previously Heard/Scheduled TELECONFERENCED
+= HB 99 EXTEND ALASKA MINERALS COMMISSION TELECONFERENCED
Moved CSHB 99(RES) Out of Committee
        HJR  6-LEGACY OIL WELL CLEAN UP/AWARENESS; NPR-A                                                                    
                                                                                                                                
1:04:39 PM                                                                                                                    
                                                                                                                                
CO-CHAIR  SADDLER  announced  that  the first  order  of  business                                                              
would be  HOUSE JOINT RESOLUTION  NO. 6, Relating to  legacy wells                                                              
and  legacy well  sites; urging  the United  States Department  of                                                              
the Interior,  Bureau  of Land Management,  to  open new areas  of                                                              
the  National  Petroleum  Reserve  -  Alaska  for  environmentally                                                              
responsible  oil and gas  development; and  requesting the  Office                                                              
of  the Governor  to increase  nationwide  awareness about  legacy                                                              
wells and well sites.                                                                                                           
                                                                                                                                
1:05:02 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE   CHARISSE  MILLETT,   Alaska  State   Legislature,                                                              
speaking as  the prime  sponsor of HJR  6, informed  the committee                                                              
that an identical  resolution passed the Alaska  State Legislature                                                              
last  year,  and   invited  comments  from  U.   S.  Senator  Lisa                                                              
Murkowski.                                                                                                                      
                                                                                                                                
1:05:50 PM                                                                                                                    
                                                                                                                                
U.S. SENATOR  LISA MURKOWSKI said  she is adamant that  a solution                                                              
must  be found  for  the issues  addressed  by HJR  6.   The  U.S.                                                              
Senate Committee  on Energy and  Natural Resources held  a hearing                                                              
last summer  to bring  national attention to  the issue  of legacy                                                              
well remediation, and  to educate members of Congress  on the dire                                                              
situation within  the National  Petroleum Reserve-Alaska  (NPR-A).                                                              
She said  at that hearing, Bud  Cribley, State Director  - Alaska,                                                              
U.S. Bureau  of Land  Management (BLM),  committed that  BLM would                                                              
prepare an action  plan for well remediation;  unfortunately, that                                                              
document  has  not  been  presented.    However,  she  pledged  to                                                              
continue to press  BLM and the U. S. Department  of Interior (DOI)                                                              
to formulate  an action plan  and to keep  their promise  to begin                                                              
the  remediation  of  leaking  wells.     Recently,  Senator  Lisa                                                              
Murkowski  brought this situation  to the  attention of  Secretary                                                              
of the  Interior Nominee  Sally Jewell, making  clear that  DOI is                                                              
engaged in a  double standard when it comes to  its responsibility                                                              
for cleanup.   Furthermore,  the Senator  has obtained  a six-fold                                                              
increase  in  funding  for  legacy well  cleanup  within  the  DOI                                                              
appropriations bill,  which should lead  to action on  this issue.                                                              
She stated  that the  situation  within NPR-A  is the pinnacle  of                                                              
environmental  negligence  and   hypocrisy  by  DOI,  which  holds                                                              
private   industry    to   the    highest   standards    regarding                                                              
environmental  protection.  Alaskans  want reasonable  exploration                                                              
and development, but  not at the risk of the  environment, and she                                                              
commended private  industry within  the state for  its compliance;                                                              
however, the  federal government  should meet the  same standards.                                                              
Coupled with other  broken promises to Alaskans,  the situation in                                                              
NPR-A  has strained  the  state's  relationship with  the  federal                                                              
government.    She also  questioned  DOI's  failure to  fund  well                                                              
remediation  efforts within  NPR-A, pointing  out that  is a  more                                                              
pressing need than  purchasing additional land.   The Senator said                                                              
Alaskans  are united  on this  issue  and urged  the committee  to                                                              
pass HJR  6 in  order to  inform the  federal administration  that                                                              
the status quo is unacceptable.                                                                                                 
                                                                                                                                
1:11:30 PM                                                                                                                    
                                                                                                                                
CO-CHAIR FEIGE  asked whether  the Senator  has suggestions  as to                                                              
whom  committee  members should  discuss  this issue  with  during                                                              
their Energy Council visit to Washington, DC.                                                                                   
                                                                                                                                
U.  S. SENATOR  LISA  MURKOWSKI advised  the  committee should  go                                                              
directly to  Ken Salazar,  Secretary of  the Interior,  because he                                                              
needs  to  know  how  important   this  problem  is  to  Alaskans.                                                              
During  his visit to  legacy well  sites last  year, although  she                                                              
provided  the location  of  a  particularly grievous  example,  he                                                              
toured only  those wells identified  by BLM that had  already been                                                              
cleaned  up.   She  offered to  provide  assistance with  contacts                                                              
through her staff.                                                                                                              
                                                                                                                                
1:14:48 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  MILLETT continued  her  presentation, noting  that                                                              
changes in HJR  6 from last session's resolution  are reflected in                                                              
the sponsor  statement.   As an  aside, she  made comments  on the                                                              
upcoming energy  council meetings.   Returning to  the resolution,                                                              
she  noted that  members  of Congress  are  not aware  of what  is                                                              
happening  in Alaska  related to  the legacy  wells, or even  that                                                              
they  exist.    Representative   Millett  pointed  out  that  $9.4                                                              
billion has  been collected from  lease sales in NPR-A;  a private                                                              
sector producer  with this  income would  be assessed  $40 billion                                                              
in  fines.   She further  advised  that  AOGCC Commissioner  Cathy                                                              
Foerster  and she have  met with  BLM in  Washington, DC,  on four                                                              
occasions.                                                                                                                      
                                                                                                                                
REPRESENTATIVE SEATON  directed attention to the HJR  6 resolve on                                                              
page 3,  line 18, related to  BLM turning over  the responsibility                                                              
for  plugging  wells,  and to  the  resolve  on  page 4,  line  1,                                                              
related  to opening  new areas.   He  asked whether  HJR 6  should                                                              
include  a  resolve   directly  requesting  BLM   to  lease  areas                                                              
containing legacy wells under certain conditions.                                                                               
                                                                                                                                
1:18:43 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  MILLETT acknowledged  that when testifying  before                                                              
the U.S. Senate,  she was asked to provide solutions.   Therefore,                                                              
she offered the  following four solutions:  transfer  NPR-A to the                                                              
state; convey  to the  state areas around  the legacy  wells; open                                                              
legacy well sites  for lease and mandated remediation;  or pay the                                                              
state $9.4 billion.   Speaking as the sponsor, she  said she would                                                              
not oppose  adding the  amendment, but  was confident  the federal                                                              
government would not transfer any land in NPR-A to the state.                                                                   
                                                                                                                                
REPRESENTATIVE  SEATON assured  the  sponsor he  did  not want  to                                                              
slow the resolution's progress, but to provide an option.                                                                       
                                                                                                                                
REPRESENTATIVE MILLETT  said that option is part  of her testimony                                                              
before  the  Senate.    In  further   response  to  Representative                                                              
Seaton, she  offered to  provide language  for the amendment,  and                                                              
to co-sponsor a floor amendment.                                                                                                
                                                                                                                                
REPRESENTATIVE JOHNSON  recalled that  many of the  affected areas                                                              
have  been  permanently  set  aside  by  Secretary  Salazar.    He                                                              
inquired as  to how  the legislature  can direct that  remediation                                                              
is completed  before the land  is transferred, or  remediation may                                                              
never be done.                                                                                                                  
                                                                                                                                
1:24:03 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE MILLETT  observed the irony that the  very land the                                                              
federal  government  is  trying   to  save  from  development  has                                                              
leaking oil and  gas wells, and barrels strewn about.   This issue                                                              
first arose in 1944,  and it is apparent that  preserving the land                                                              
but not cleaning up the wells is hypocritical.                                                                                  
                                                                                                                                
REPRESENTATIVE JOHNSON  feared locking the land up  so the problem                                                              
can be ignored.                                                                                                                 
                                                                                                                                
REPRESENTATIVE  MILLETT said maybe,  the Environmental  Protection                                                              
Agency (EPA)  statute of limitations  has run  out.  She  told the                                                              
committee one  of the wells  in the Colville  River was  buried by                                                              
an  avalanche  and  is  inaccessible;   some  are  in  marshes  or                                                              
becoming  lakes  and are  a  threat  to wildlife  and  subsistence                                                              
hunters.    Another  major question is  why not one  environmental                                                              
group has  helped get the wells  cleaned up, yet they  continue to                                                              
carefully watch  producers on  the North  Slope for the  slightest                                                              
infraction.                                                                                                                     
                                                                                                                                
1:31:09 PM                                                                                                                    
                                                                                                                                
CATHY  FOERSTER, Commissioner,  Alaska  Oil  and Gas  Conservation                                                              
Commission  (AOGCC),  thanked  Representative   Millett  and  U.S.                                                              
Senator Lisa Murkowski  for their past work on  this issue because                                                              
progress is  now being made.   She emphasized that the  passage of                                                              
HJR 6 will keep  attention on the matter, and  maintains momentum.                                                              
The resolution last  year prompted a presentation  before the U.S.                                                              
Senate Energy Committee  which spurred a commitment  between AOGCC                                                              
and  BLM  to  produce  an  assessment  and  plan  for  each  well.                                                              
Although BLM  and AOGCC  are not in  agreement with  the condition                                                              
or management  of each  well, the  two agencies  will continue  to                                                              
work  together.    Commissioners  at  AOGCC  initiated  a  monthly                                                              
public review  of wells  with comments  from BLM.   This is  a new                                                              
approach  which  is  effective;  in  fact,  ten  wells  have  been                                                              
removed  from the  "concerns list"  through  agreement on  shallow                                                              
boreholes.  At this  time, AOGCC is studying wells  that have been                                                              
plugged  by  BLM,  but that  do  not  meet  Alaska's  regulations.                                                              
Compared to  last year, the assessment  phase has progressed.   In                                                              
addition,  Ms.  Foerster  explained   that  due  to  the  previous                                                              
resolution,  small amounts  of monies  are being  allocated to  be                                                              
used on high-priority wells with mutual understanding.                                                                          
                                                                                                                                
1:36:36 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE JOHNSON  asked for assurance that  methane gas will                                                              
not be a problem for wells drilled less than 50 feet deep.                                                                      
                                                                                                                                
MS.  FOERSTER  said that  is  not  a  problem  for the  ten  wells                                                              
removed  from the  list.   In further  response to  Representative                                                              
Johnson,  she said there  may be  a risk  to someone traveling  by                                                              
snow machine  over the tundra  in winter,  or to berry  pickers in                                                              
summer.   She provided  pictures of  oil barrels and  contaminated                                                              
lakes.                                                                                                                          
                                                                                                                                
REPRESENTATIVE  JOHNSON  posed circumstances  of  a lake  recently                                                              
contaminated  by an old  well and asked  whether EPA  would assess                                                              
this  as a  new problem  even if  the statute  of limitations  had                                                              
expired on the well site.                                                                                                       
                                                                                                                                
MS.  FOERSTER  relayed  she approached  the  environmental  crimes                                                              
unit of  the EPA and was  informed "because these  crimes occurred                                                              
X  years ago,  they're  outside of  the  statute of  limitations."                                                              
She displayed a  slide of the Iko Bay 1 well  located near Barrow,                                                              
which is leaking methane gas - a human health risk.                                                                             
                                                                                                                                
REPRESENTATIVE TARR  noted there are abandoned U.S.  Department of                                                              
Defense (DoD)  sites in  the northern  regions, and asked  whether                                                              
there is an opportunity  to combine cleanup efforts  with those on                                                              
abandoned military sites to be more efficient.                                                                                  
                                                                                                                                
MS.  FOERSTER  deferred   to  a  representative   of  the  federal                                                              
government.                                                                                                                     
                                                                                                                                
1:41:28 PM                                                                                                                    
                                                                                                                                
BUD  CRIBLEY, State  Director-Alaska, Bureau  of Land  Management,                                                              
U.S. Department of  the Interior, directed attention  to a written                                                              
statement provided  in the committee  packet, and  summarized from                                                              
that statement as follows:                                                                                                      
                                                                                                                                
     Essentially  what  we  want  to  do  is  reaffirm  BLM's                                                                   
     commitment  to working on  the legacy  well issue  up in                                                                   
     the National  Petroleum Reserve.   We  have, as we  have                                                                   
     previously  testified,   committed  to   completing  and                                                                   
     providing  information to AOGCC  and our other  partners                                                                   
     up on  the North  Slope, our  current assessment  of the                                                                   
     status of all  of those wells; we've provided  copies of                                                                   
     that  draft  report  to  those  entities  including  the                                                                   
     AOGCC   asking  them   ...  if   they  have   additional                                                                   
     information  to  provide  to  us to  include  into  that                                                                   
     assessment.   We would use that in future  evaluation of                                                                   
     risks  of those  wells out  on the  NPR-A.    Then  also                                                                   
     want to reaffirm  our commitment to you all  and also to                                                                   
     the  Senator, that  we will  from  that information  and                                                                   
     working  with AOGCC  develop  a strategy  on our  future                                                                   
     work up there  as far as identifying priority  wells and                                                                   
     putting  together a  strategy  on how  we  will work  to                                                                   
     mitigate  those  wells and  the  risks that  they  pose.                                                                   
     The BLM  has been ... in  2004, BLM completed  its first                                                                   
     assessment of  the wells.  At that time  we put together                                                                   
     a plan  of, or  identified, the  highest risk wells  and                                                                   
     put together  a plan in  which we addressed  those wells                                                                   
     and  mitigated those  wells.   Up  until  2012, we  have                                                                   
     been  able to  address  all  of those  but  the Iko  Bay                                                                   
     well.   So, and  ... since  2002 the federal  government                                                                   
     has  invested   over  $86   million  in  mitigation   of                                                                   
     concerns  with ...  both  surface disturbance  and  also                                                                   
     with the wells'  down-hole issues on wells  on the North                                                                   
     Slope.    We have  been  committed  and continue  to  be                                                                   
     committed on  this issue.   We recognize the  importance                                                                   
     of it, and  the need to work  on this issue.  So,  it is                                                                   
     not  our intent  to ignore  or to not  fulfill what  our                                                                   
     responsibilities are on managing those public lands.                                                                       
                                                                                                                                
1:44:22 PM                                                                                                                    
                                                                                                                                
MR. CRIBLEY  reemphasized that  BLM is working  as a  partner with                                                              
AOGCC on  identifying the issues with  the wells, and to  look for                                                              
resolutions.  In  addition, BLM will work with AOGCC  to develop a                                                              
strategy  on  determining the  priority  wells,  and how  to  best                                                              
consolidate operations to complete the work.                                                                                    
                                                                                                                                
CO-CHAIR FEIGE  asked for  the status and  delivery dates  for the                                                              
undelivered  document mentioned  by U.S.  Senator Lisa  Murkowski,                                                              
and  for  the  final  summary  report  and  draft  five-year  plan                                                              
referred to in Mr. Cribley's written statement.                                                                                 
                                                                                                                                
MR. CRIBLEY  responded the  summary report  has been delivered  to                                                              
AOGCC and to BLM's  working partners on the North  Slope for their                                                              
review  and additions,  if  necessary.   At  the time  all of  the                                                              
information  is collected,  BLM  will meet  with  its partners  to                                                              
identify  priority wells  and the  process  for their  mitigation.                                                              
He  acknowledged  the  original  intent  was  to  have  this  task                                                              
completed by the end of 2012.                                                                                                   
                                                                                                                                
CO-CHAIR  FEIGE assumed that  whatever strategy  BLM pursues  will                                                              
cost  money.    Given the  present  financial  restraints  on  the                                                              
federal  government, he  asked  how much  revenue  is received  in                                                              
annual  lease  payments and  whether  a  portion of  that  revenue                                                              
could be directed towards well cleanup.                                                                                         
                                                                                                                                
MR. CRIBLEY  said the federal  government has received  about $393                                                              
million  in revenue  from lease  sales in NPR-A  since the  1980s.                                                              
Fifty percent  of that revenue  has gone  to the State  of Alaska,                                                              
the other  half into  the federal treasury.   Annual  rental rates                                                              
on existing leases  total about $4.5 million, of  which 50 percent                                                              
goes to the state  and 50 percent into the federal  treasury.  Mr.                                                              
Cribley  advised making  those funds  available to  the BLM  would                                                              
require a legislative  change because of leasing  regulations.  He                                                              
restated that the  federal government has invested  $86 million in                                                              
work on the wells in NPR-A, which is very unusual.                                                                              
                                                                                                                                
1:48:40 PM                                                                                                                    
                                                                                                                                
CO-CHAIR  FEIGE  reminded  Mr. Cribley  that  almost  every  state                                                              
requires  a bonding  program before  drilling a  well is  allowed.                                                              
He  pointed  out  that  the  federal  government's  share  of  the                                                              
initial lease  payments has been  about $190 million, which  is an                                                              
amount sufficient to plug many wells.                                                                                           
                                                                                                                                
REPRESENTATIVE  JOHNSON asked  how many wells  with problems  have                                                              
been "fixed" with the $86 million.                                                                                              
                                                                                                                                
MR.  CRIBLEY answered  that  18 wells  have  been mitigated  since                                                              
2002.    In   further  response  to  Representative   Johnson,  he                                                              
explained  those  wells were  identified  as priorities  in  2004.                                                              
All but one  of the priorities have  been dealt with,  and at this                                                              
time, remaining  wells are being reassessed for  environmental and                                                              
human health risks.                                                                                                             
                                                                                                                                
REPRESENTATIVE  JOHNSON displayed  a photo  of barrels  in a  pool                                                              
with debris.  He asked if it is an old picture.                                                                                 
                                                                                                                                
MR. CRIBLEY  said he was  unsure when the  picture was  taken, but                                                              
surmised the  situation is unchanged.   He noted that the  well at                                                              
the site  pictured was plugged by  BLM and the structure  has been                                                              
reattached  above ground.   The  oil/water on  the site  is not  a                                                              
lake but an oil  seep that occurs naturally on the  North Slope in                                                              
certain areas.   The barrels were  not cleaned up because  BLM did                                                              
not have  the money or the  ability; however, the site  remains on                                                              
BLM's  priority list  although there  are questions  as to  how to                                                              
remove the surface debris.                                                                                                      
                                                                                                                                
1:52:01 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE   JOHNSON  asked   about  the   condition  of   the                                                              
mitigated 18 wells.                                                                                                             
                                                                                                                                
MR.  CRIBLEY explained  each  well  is different  with  individual                                                              
issues,  many of  which  are related  to the  status  of the  well                                                              
itself.  In most  cases, the biggest issue is plugging  the actual                                                              
well and not the debris that is left behind.                                                                                    
                                                                                                                                
REPRESENTATIVE JOHNSON  said he does not see  commitment, but only                                                              
involvement, and would like to see more commitment from BLM.                                                                    
                                                                                                                                
REPRESENTATIVE  TARR returned  to the question  she posed  earlier                                                              
about  the  opportunity  for  agencies  such  as BLM  and  DoD  to                                                              
collaborate and  work together more efficiently to  address nearby                                                              
abandoned DoD  sites along  with the legacy  wells.   In addition,                                                              
she inquired  whether the cost  would remain  at an average  of $5                                                              
million each for wells of lessor priority.                                                                                      
                                                                                                                                
MR. CRIBLEY assured  the committee that BLM has  been working with                                                              
other agencies  on DoD sites  whenever an opportunity  to minimize                                                              
costs  arises.     In  fact,   the  next  strategy   will  include                                                              
leveraging costs  with other  activities in the  area in  order to                                                              
expand the  amount of  mitigation work  possible.   As far  as the                                                              
cost per  well, although each  project is different,  grouping the                                                              
projects will  reduce the cost per  well.  He could not  provide a                                                              
long-term  projection  of total  cost.    In further  response  to                                                              
Representative Tarr,  he clarified that  the report that  has been                                                              
received is the  well assessment, updated inventory  report.  Once                                                              
the inventory  report  is finalized,  BLM will  begin work  on the                                                              
strategic plan  which will  be available to  the public.   He then                                                              
confirmed   that  BLM   leadership   is  committed   to   pursuing                                                              
collaboration with other entities.                                                                                              
                                                                                                                                
1:57:35 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE HAWKER  asked whether  Mr. Cribley agrees  with Ms.                                                              
Forester's assessment of the Iko Bay well situation.                                                                            
                                                                                                                                
MR. CRIBLEY  said BLM  recognizes the  Iko Bay  well is  a leaking                                                              
well, and  although monitoring  crews were on  site this  year and                                                              
found there is minor  seepage right now, it is  still important to                                                              
remediate that well as conditions can change.                                                                                   
                                                                                                                                
REPRESENTATIVE HAWKER  questioned why the well has  not been dealt                                                              
with in nine years.                                                                                                             
                                                                                                                                
MR.  CRIBLEY attributed  the  delay to  funding  and the  agency's                                                              
incapacity to accomplish that task.                                                                                             
                                                                                                                                
REPRESENTATIVE  HAWKER expressed  his concern  about the  level of                                                              
cooperation between  BLM and AOGCC  regarding the wells  that have                                                              
been  plugged.    For  example,  does  BLM  comply  with  Alaska's                                                              
standards in that regard?                                                                                                       
                                                                                                                                
MR. CRIBLEY  acknowledged he cannot  say whether all of  the wells                                                              
have been  plugged  to all of  Alaska's standards  at this  point.                                                              
However,  he  said  BLM  intends  to continue  to  work  to  reach                                                              
consensus  with AOGCC  on standards;  BLM recognizes  difficulties                                                              
in  the working  relationship  with  AOGCC and  seeks  to come  to                                                              
agreement on what work needs to be done on the ground.                                                                          
                                                                                                                                
REPRESENTATIVE  HAWKER remained  concerned  about  the quality  of                                                              
BLM's remediation process.                                                                                                      
                                                                                                                                
2:01:04 PM                                                                                                                    
                                                                                                                                
MR. CRIBLEY  explained BLM generally  tries to remediate  the well                                                              
and the site, depending on the agency's capacities and goals.                                                                   
                                                                                                                                
REPRESENTATIVE   HAWKER  opined  there   is  a  very   significant                                                              
difference of  opinion between  BLM, those who  live on  the North                                                              
Slope, and  AOGCC, about  the quality and  competence of  the work                                                              
that has been done to date.                                                                                                     
                                                                                                                                
MR.  CRIBLEY   stated  BLM's   intent  in   sharing  its   updated                                                              
assessment  report  is  to  allow  for  its  partners  to  respond                                                              
regarding  the  condition  of  the   wells.    The  wells  on  the                                                              
assessment list are also included in the inventory for comment.                                                                 
                                                                                                                                
CO-CHAIR SADDLER agreed with Representative Johnson.                                                                            
                                                                                                                                
REPRESENTATIVE JOHNSON  asked whether BLM is required  to file for                                                              
permits to begin remediation work.                                                                                              
                                                                                                                                
MR.  CRIBLEY  said no.    In further  response  to  Representative                                                              
Johnson,  Mr.   Cribley  said  BLM   follows  the   same  standard                                                              
operating procedures  and mitigations  that are placed  on private                                                              
companies to  mitigate impacts to  the environment  when accessing                                                              
sites and doing  work, thus the  high cost and delays.   There are                                                              
sites  around Barrow  that can  be  accessed in  summer, but  most                                                              
activities are focused during winter, as are private projects.                                                                  
                                                                                                                                
MS. FOERSTER  informed the committee  every operator who  drills a                                                              
well or  performs well work  - including plugging  and abandonment                                                              
- is required  by Alaska statute and regulation  to get permission                                                              
from AOGCC.   However, BLM is of  the opinion it does  not need to                                                              
do so.                                                                                                                          
                                                                                                                                
2:05:50 PM                                                                                                                    
                                                                                                                                
CO-CHAIR SADDLER opened public testimony on HJR 6.                                                                              
                                                                                                                                
2:06:10 PM                                                                                                                    
                                                                                                                                
PAMELA  A.  MILLER,  Arctic  Program   Director,  Northern  Alaska                                                              
Environmental  Center  (NAEC),   said  her  organization  was  not                                                              
prepared to  speak to  the resolution at  this time;  however, she                                                              
informed the committee  that beginning in 1997,  the environmental                                                              
community brought  this issue  to the attention  of BLM  and urged                                                              
that no  new wells  should be drilled  before others  were cleaned                                                              
up.  In  2002, concerns about  dismantling and restoration  of old                                                              
oil field  facilities led to  a review of  the matter by  the U.S.                                                              
General  Accountability Office  (U.S.GAO).   The  U.S. GAO  review                                                              
brought  out   the  role  of   the  Department  of   Environmental                                                              
Conservation  (DEC), which  was  involved from  1992  in the  work                                                              
done by  BLM and  the U.S.  Geological Survey  related to  reserve                                                              
pit sites  surrounding the wells.   In 1995, DEC declared  that no                                                              
further  cleanup work  was  required on  27  NPR-A drilling  waste                                                              
sites  to reduce  the risk  to surface  water  in the  area.   Her                                                              
personal  experience  is  that  in  1992,  28  of  the  pit  sites                                                              
exceeded  the  toxicity criteria  of  one  or more  water  quality                                                              
standards.  The  U.S. GAO review also looked at  state and federal                                                              
bonding   requirements  for   wells,  noting   that  the   bonding                                                              
requirement  per well  in Alaska  is  $200,000 to  $500,000.   She                                                              
concluded, saying  there are many dozens of contaminated  sites on                                                              
state land  awaiting funding.   In  response to Co-Chair  Saddler,                                                              
she  restated  NAEC cannot  take  a  position without  seeing  the                                                              
final version of the resolution that is reported from committee.                                                                
                                                                                                                                
2:10:42 PM                                                                                                                    
                                                                                                                                
CO-CHAIR  FEIGE asked  how much  NAEC  has spent  trying to  bring                                                              
this issue to the attention of BLM.                                                                                             
                                                                                                                                
MS.  MILLER advised  NAEC has  raised  the issue  repeatedly.   In                                                              
response to  Representative P. Wilson,  she said emails  have been                                                              
utilized to raise public awareness.                                                                                             
                                                                                                                                
CO-CHAIR  FEIGE  asked  whether  NAEC  has  ever  initiated  legal                                                              
action against the federal government in this matter.                                                                           
                                                                                                                                
MS.  MILLER said  no.   The  major problem  is  funding, and  NAEC                                                              
historically  works through  the administrative  processes of  BLM                                                              
and DEC.                                                                                                                        
                                                                                                                                
2:14:15 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE TARR  asked whether  Ms. Miller has  concerns about                                                              
aspects of the proposed conceptual amendment.                                                                                   
                                                                                                                                
MS.  MILLER  did   not  clearly  hear  all  four   options.    Her                                                              
organization  supports  the  existing  BLM land  use  plan,  final                                                              
decision [Record  of Decision executed  2/21/13] which  allows the                                                              
pipeline  corridor through  NPR-A.   She  opined  the best  option                                                              
ties the operations  to the leaseholder so that  areas are cleaned                                                              
up before new operations begin.                                                                                                 
                                                                                                                                
2:15:35 PM                                                                                                                    
                                                                                                                                
CO-CHAIR SADDLER,  after ascertaining that  no one else  wished to                                                              
testify, closed public testimony.                                                                                               
                                                                                                                                
2:15:52 PM                                                                                                                    
                                                                                                                                
CO-CHAIR SADDLER handed the gavel to Co-Chair Feige.                                                                            
                                                                                                                                
[Final  action on  HJR 6  is reported  at the  conclusion of  this                                                              
meeting.]                                                                                                                       
                                                                                                                                
        HJR  6-LEGACY OIL WELL CLEAN UP/AWARENESS; NPR-A                                                                    
                                                                                                                                
[Initial  discussion of  HJR 6  occurs  at the  beginning of  this                                                              
meeting.]                                                                                                                       
                                                                                                                                
3:00:04 PM                                                                                                                    
                                                                                                                                
CO-CHAIR FEIGE returned attention to the consideration of HJR 6.                                                                
                                                                                                                                
3:00:34 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE SEATON moved Conceptual Amendment 1 which read:                                                                  
                                                                                                                                
     Page 3 after line 22                                                                                                       
                                                                                                                                
     Insert:                                                                                                                    
                                                                                                                                
     "Further  Resolved  that the  Alaska  State  Legislature                                                                 
     urges the  United States Department of  Interior, Bureau                                                                   
     of  Land  Management, to  consider  accelerating  legacy                                                                   
     well  resolution  by  offering  a  priority  competitive                                                                   
     lease  to  industry  of a  reasonably  constructed  unit                                                                   
     area  including legacy  wells  and that  a condition  be                                                                   
     placed  that   the  lessee   shall  within  two   years,                                                                   
     contingent  upon  issuance  of permits  by  the  federal                                                                   
     government  and State of Alaska,  plug the legacy  wells                                                                   
     and remediate the site.                                                                                                    
                                                                                                                                
REPRESENTATIVE HAWKER objected for the purpose of discussion.                                                                   
                                                                                                                                
REPRESENTATIVE  SEATON explained  that  the resolve  in  HJR 6  on                                                              
page 3, line  18, urges BLM to  consider turning over  the task of                                                              
plugging wells  to an  independent authority,  and the  resolve on                                                              
page 4, line 1,  is related to opening new areas.    He said there                                                              
is  no   request  for   the  federal   government  to   lease  for                                                              
development  areas  that  contain legacy  well  sites;  Conceptual                                                              
Amendment  1  asks the  federal  government  to  lease on  a  time                                                              
priority basis,  unit-sized areas containing legacy  wells for the                                                              
purpose  of  leasing for  development  and  also for  getting  the                                                              
legacy wells  remediated.  Thus,  a contingency would be  that two                                                              
years  after being  granted a permit,  the lessee  would agree  to                                                              
plug  the wells  and remediate  the site.   Representative  Seaton                                                              
pointed out  that the  time period  is linked  to the issuance  of                                                              
the permit.                                                                                                                     
                                                                                                                                
REPRESENTATIVE HAWKER  said but he did not understand  how a lease                                                              
containing  a  badly-managed   legacy  well  would   appeal  to  a                                                              
potential  explorer/developer  considering the  extreme  liability                                                              
for remediation of  the well and that the well itself  would be an                                                              
indication  that the area  is marginal  for the identification  of                                                              
hydrocarbons.     He  suggested  the  amendment   compromises  the                                                              
integrity of the resolution.                                                                                                    
                                                                                                                                
3:04:26 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE MILLETT  agreed the  proposed amendment would  be a                                                              
deterrent  to a  lessee if  the  lessee had  to pay  a lease  cost                                                              
also.   However,  it  was recommended  to  the federal  government                                                              
that it  could lease  the land at  no cost,  and instead,  part of                                                              
the lease  payment would be the  remediation of the  legacy wells.                                                              
In some  cases, legacy  wells are  capable of  oil production  and                                                              
there are also  leaking gas wells that are capable  of production.                                                              
She advised that  companies are interested in the  prolific legacy                                                              
wells that  have the potential  for producing hydrocarbons  if the                                                              
federal government will negotiate lower lease costs.                                                                            
                                                                                                                                
REPRESENTATIVE HAWKER  asked whether the resolution's  sponsor has                                                              
taken  into  consideration  that   many  oil  and  gas  seeps  are                                                              
condensates  or  other  hydrocarbons  that  are  not  economic  to                                                              
develop.                                                                                                                        
                                                                                                                                
REPRESENTATIVE TUCK  inquired if the federal  government currently                                                              
allows leases in the affected areas at this time.                                                                               
                                                                                                                                
REPRESENTATIVE  MILLETT  responded  that  the land  designated  as                                                              
wilderness  is not available  for lease.   She  was unsure  of the                                                              
federal government's  plan for leasing  legacy wells,  noting that                                                              
the well  at Iko Bay is  leaking methane and  could be used  as an                                                              
energy source  for the nearby village,  but is not "see(n)  as ...                                                              
anything  that   is  environmentally  hazardous,   but  they  also                                                              
haven't leased  that area for  someone to  ... produce gas  off of                                                              
it."   She discounted BLM's  claim that  it is working  with AOGCC                                                              
on a program  because the two agencies  do not agree with  what is                                                              
environmentally  dangerous; the  federal government has  different                                                              
definitions on what is high priority than does AOGCC.                                                                           
                                                                                                                                
3:08:39 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  JOHNSON expressed his  concern that  the amendment                                                              
would only  give a lessee one year  from the time of  the issuance                                                              
of the permit in which to remediate.                                                                                            
                                                                                                                                
REPRESENTATIVE  MILLETT  concurred; the  permits  issued by  AOGCC                                                              
are only  valid for  two years.   In  response to Co-Chair  Feige,                                                              
she said  as the  sponsor,  she did not  have a  problem with  the                                                              
amendment  because  giving  the federal  government  more  options                                                              
indicates  that  the  state  is  serious  about  cleaning  up  the                                                              
environment.                                                                                                                    
                                                                                                                                
CO-CHAIR SADDLER observed the amendment may create problems.                                                                    
                                                                                                                                
REPRESENTATIVE   JOHNSON   asked   whether   the   amendment   was                                                              
necessary.                                                                                                                      
                                                                                                                                
REPRESENTATIVE MILLETT said no.                                                                                                 
                                                                                                                                
REPRESENTATIVE HAWKER removed his objection.                                                                                    
                                                                                                                                
3:11:23 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE P. WILSON objected.                                                                                              
                                                                                                                                
REPRESENTATIVE SEATON  stated the purpose of the  amendment was to                                                              
provide another  option for  leasing; he  offered to withdraw  the                                                              
amendment at the request of the sponsor.                                                                                        
                                                                                                                                
REPRESENTATIVE  MILLETT said  her  preference is  to withdraw  the                                                              
amendment.                                                                                                                      
                                                                                                                                
REPRESENTATIVE SEATON withdrew Conceptual Amendment 1.                                                                          
                                                                                                                                
3:13:07 PM                                                                                                                    
                                                                                                                                
CO-CHAIR SADDLER  moved to report HJR 6, Version  28-LS0300\N, out                                                              
of   committee    with   individual   recommendations    and   the                                                              
accompanying fiscal  notes.  There  being no objection, HJR  6 was                                                              
reported from the House Resources Standing Committee.                                                                           

Document Name Date/Time Subjects
HJR6 LAA Fiscal Note.pdf HRES 2/27/2013 1:00:00 PM
HJR 6
HJR6 AOGCC Presentation.pdf HRES 2/27/2013 1:00:00 PM
HJR 6
HJR6 Petroleum News Article.pdf HRES 2/27/2013 1:00:00 PM
HJR 6
HJR6 RDC Letter.pdf HRES 2/27/2013 1:00:00 PM
HJR 6
HJR6 Sponsor Statement.pdf HRES 2/27/2013 1:00:00 PM
HJR 6
HJR6 Version N.pdf HRES 2/27/2013 1:00:00 PM
HJR 6
HJR7 ANWR Map.pdf HRES 2/27/2013 1:00:00 PM
HJR 7
HJR7 CBO Report.pdf HRES 2/27/2013 1:00:00 PM
HJR 7
HJR7 LAA Fiscal Note.pdf HRES 2/27/2013 1:00:00 PM
HJR 7
HJR7 RDC Letter.pdf HRES 2/27/2013 1:00:00 PM
HJR 7
HJR7 Sponsor Statement.pdf HRES 2/27/2013 1:00:00 PM
HJR 7
HJR7 Version U.pdf HRES 2/27/2013 1:00:00 PM
HJR 7
HJR7 Version N.pdf HRES 2/27/2013 1:00:00 PM
HJR 7
HJR7 ACE Letter.pdf HRES 2/27/2013 1:00:00 PM
HJR 7
HJR6 Cribley Testimony.pdf HRES 2/27/2013 1:00:00 PM
HJR 6