Legislature(1995 - 1996)
04/19/1996 03:45 PM Senate RES
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* first hearing in first committee of referral
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+ teleconferenced
= bill was previously heard/scheduled
CSHB 388(RES) am OIL & GAS LEASING/ BEST INT. FINDINGS
CHAIRMAN LEMAN brought CSHB 388(RES) am before the committee as the
next order of business.
REPRESENTATIVE ROKEBERG , prime sponsor of HB 388, explained the
goal of the legislation is to make more land available to the
petroleum industry for leasing and a more predictable schedule. He
said the additional acreage will provide a situation where there is
more competition in the state and potentially invite smaller
independents and other such explorers into the state of Alaska.
Representative Rokeberg pointed out that by amending this existing
statute for exempt and reoffered sales, there will be no delay in
a current reschedule, as well as a zero fiscal impact.
The legislation will extend the life of a best interest finding
from five years to 10 years. It also establishes a clear and
streamlined process for approval of what is called a supplement,
based only on substantial new information to an existing best
interest finding, while also including a reasonable time period for
public notice and comments.
Representative Rokeberg pointed out CSHB 388(RES) am passed out of
the House unanimously, and the bill itself was a consensus bill
developed with the Alaska Oil & Gas Association (AOGA) and the
administration.
PAT FOLEY , Chairman, Lands, Exploration & Operations Committee,
Alaska Oil & Gas Association, stated their support for CSHB
388(RES) am. He said AOGA encourages annual areawide leasing in
areas of the state where competitive leases are regularly offered,
and this legislation will provide the vehicle for the state to
institute annual areawide lease sales.
Mr. Foley pointed out that previous versions of HB 388 had included
the term "areawide" to describe the intent of the legislation.
However, the bill was amended on the floor of the House to remove
references to areawide lease sales. AOGA believes it would
reinforce the state's intent to institute annual areawide leasing
by amending Section 2 to insert the word "areawide" and to remove
the requirement to annually offer AS 38.05.180(d) exempt lands. He
said that on one hand, the bill will have the same legal effect
with or without these specific words, but on the other hand, the
words "areawide lease sale" are a term of art used by the industry
to differentiate these lease sales from nomination-based lease
sales. Including the term "areawide" could help non-Alaska
operators understand the important opportunity this bill
represents.
Concluding his testimony, Mr. Foley said AOGA strongly supports the
bill with or without the suggested amendment.
BILL STAMPS , representing the Alaska Support Industry Alliance and
testifying from Kenai, voiced their support for implementation of
a regular and dependable lease sale program for all of Alaska. It
needs to be a lease program that is economical and functional, and
one that best serves the needs of the state of Alaska and its
residents, and one that perspective bidding companies that provide
so much of Alaska's economic base can rely on. The Alliance
believes that CSHB 388(RES) am is such a bill and they support its
passage. The Alliance also supports the incorporation of AOGA's
suggested amendment.
TAPE 96-61, SIDE A
Number 001
GEORGE FINDLING , representing ARCO Alasksa, Inc., and testifying
from Anchorage in support of AOGA's position, said as a part of a
concerted industry effort with the administration, they have been
working on a mechanism to provide endorsement of an areawide lease
sale concept and to provide that the scope and usefulness of best
interest findings be expanded, to change and streamline the
existing process and reduce the number of best interest findings
the Division of Oil & Gas must prepare, yet does not limit the
public comments on the best interest findings. He stated ARCO's
support for the provisions contained in CSHB 388(RES) am.
KEN BOYD , Director, Division of Oil & Gas, Department of Natural
Resources, voiced his support for CSHB 388(RES) am, and expressed
his appreciation for the process that went into putting the bill
together, which he thinks works for everybody. He said they have
every intention of moving forward with the reoffering sales.
However, he is not in support of AOGA's proposed amendment, because
he does not think it is useful to put words like "areawide leasing"
into statute, but he added that he has no strong opinion on it.
Number 078
SENATOR PEARCE asked what the proposed time frame would be for
offering these areawide, and how long he thinks it would take for
the division to be ready with the first set of best interest
findings. MR. BOYD responded that they are on that path now. Sale
87 will be held in 1998, and it will be the first areawide lease
sale. Right now, through the finding process and through SB 308,
which passed a couple of years ago, they are building a foundation
of findings they need to make this program work. If they can build
the findings successfully and get a good foundation, they are ready
to go.
SENATOR PEARCE asked Mr. Boyd if the Coastal Policy Council has
taken a position on this legislation. MR. BOYD answered that to
his knowledge, they had not. SENATOR PEARCE predicted that they
are not going to like it.
KEVIN TABLER , Land Manager, Union Oil Co., testifying from
Anchorage, said UNOCAL has followed this piece of legislation
through its passage in the House and is encouraged by its progress
to date. He said as a member of the Alaska Oil & Gas Association,
UNOCAL has participated on various committees which have reviewed
the committee substitute, and they would lend their support to the
comments made by Mr. Foley. He stated UNOCAL encourages passage of
CSHB 388(RES) am with inclusion of the AOGA amendment.
Number 214
SENATOR PEARCE moved adoption of the following amendment to CSHB
388(RES) am:
Amendment No. 1
Page 2: Delete lines 18 through 21 and replace with the following
language:
"(B) to offer acreage for oil and gas lease, specifically
including
(i) state acreage that has been the subject of a best
interest finding at annual areawide lease sales; and"
Hearing no objection, the Chairman stated the amendment was
adopted.
SENATOR PEARCE moved SCS CSHB 388(RES) and a new fiscal note to be
prepared by the department be passed out of committee with
individual recommendations. Hearing no objection, it was so
ordered.
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