Legislature(2013 - 2014)BUTROVICH 205

03/25/2013 03:30 PM Senate RESOURCES


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03:32:21 PM Start
03:32:58 PM HJR6
04:48:31 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+= HJR 6 LEGACY OIL WELL CLEAN UP/AWARENESS; NPR-A TELECONFERENCED
Moved SCS HJR 6(RES) Out of Committee
AOGCC
BLM
Bills Previously Heard/Scheduled
        HJR  6-LEGACY OIL WELL CLEAN UP/AWARENESS; NPR-A                                                                    
                                                                                                                                
3:32:58 PM                                                                                                                    
CHAIR GIESSEL announced HJR 6 to be up for consideration.                                                                       
                                                                                                                                
3:33:02 PM                                                                                                                    
REPRESENTATIVE   MILLETT,   sponsor  of   HJR   6,  Alaska   State                                                              
Legislature,  Juneau,  Alaska,   said  it  was  hard  for  her  to                                                              
comprehend why  the federal government  has turned a blind  eye to                                                              
these wells  that were drilled between  1944 and 1981 in  the NPR-                                                              
A. Since she  had started work on  this issue, only 17  of the 137                                                              
wells had  been correctly  plugged and cleaned  up; 120  are still                                                              
out there.  She had worked  very hard with  the BLM  to coordinate                                                              
with the  Alaska Oil  and Gas Conservation  Commission  (AOGCC) to                                                              
get a cleanup plan  in progress and come to some  agreement on how                                                              
to  remediate   them  so   as  to   not  conflict  with   Alaska's                                                              
regulations.  For   example,  Representative  Millett   said,  the                                                              
residents of  Barrow are so close  to one well that they  can hear                                                              
it whistling because  of escaping gas. Some tundra  locations have                                                              
barrels  marked  "hazardous" that  the  Navy  brought  in, but  it                                                              
isn't  known what they  contain.  Some wells  are leaking  and two                                                              
can't be  found; one is  buried under the  Coleville River  from a                                                              
landslide and others  have started to sink and  have lakes forming                                                              
over  them.  These   will  require  a  lot  more   investment  for                                                              
remediation.                                                                                                                    
                                                                                                                                
REPRESENTATIVE  MILLETT  said this  resolution  hopes  to get  the                                                              
federal  government's attention  and  encourage them  to clean  up                                                              
the wells  and to  open more  areas of  the NPR-A for  exploration                                                              
and production.  Senator Lisa  Murkowski had  been a champion  and                                                              
had received $6  million in addition to the $1  million every year                                                              
that is put towards this issue.                                                                                                 
                                                                                                                                
REPRESENTATIVE  MILLETT said they  want the BLM  to work  with the                                                              
AOGCC to get some  reasonable way to clean the wells  up. And they                                                              
would like them  to not send a  message to the rest  of the people                                                              
that do  business in Alaska  that it's okay  to leave the  land in                                                              
this condition when they are done drilling for resources.                                                                       
                                                                                                                                
3:37:15 PM                                                                                                                    
SENATOR MCGUIRE joined the committee.                                                                                           
                                                                                                                                
REPRESENTATIVE  MILLETT  said  that Cathy  Foerster  had  recently                                                              
gone through  some of  the in-depth  well data  and came  across a                                                              
line  in the  well data  that talked  about making  some of  these                                                              
wells historic  sites. When questioned  about it, the BLM  said it                                                              
was  "inartful" wording  on the  bottom of  the well  description.                                                              
But in reality,  it is a practice  that they have used  to declare                                                              
some  wells historic  sites  and  that is  the  last thing  Alaska                                                              
wants them  to do. There is  nothing historic about  wells seeping                                                              
oil and gas out on to the tundra.                                                                                               
                                                                                                                                
3:38:43 PM                                                                                                                    
SENATOR DYSON  said he was proud  of her for reaching  down in the                                                              
mud and raising this up as an issue.                                                                                            
                                                                                                                                
REPRESENTATIVE MILLETT  said she couldn't take all  the credit for                                                              
it; Cathy Foerster,  Senator Murkowski, and everyone  who had gone                                                              
to the Energy Council brought this message.                                                                                     
                                                                                                                                
CHAIR GIESSEL thanked the sponsor and welcomed Ms. Foerster.                                                                    
                                                                                                                                
3:39:49 PM                                                                                                                    
CATHY  FOERSTER, Engineering  Commissioner and  Chair, Alaska  Oil                                                              
and  Gas  Conservation  Commission   (AOGCC),  Anchorage,  Alaska,                                                              
supported HJR 6  saying she had been beating her  head against the                                                              
wall over this issue  for eight years. The reason  this is between                                                              
1944-1982 the  federal government drilled  136 "legacy wells"   to                                                              
test Arctic  drilling concepts in the  NPR-A; they are  all on the                                                              
western  North  Slope in  or  near  the  NPR-A where  the  federal                                                              
government has  recently closed to future development,  supposedly                                                              
to protect the  environment. But the pictures show  what they have                                                              
already done to the area and are refusing to fix.                                                                               
                                                                                                                                
She explained that  the BLM operates these legacy  wells showing a                                                              
picture  of one  of the  better  ones that  was  only a  collision                                                              
hazard  for   snow  machiners  and   ATVers  and  a   drowning  or                                                              
entrapment hazard  for children or small animals.  She stated that                                                              
essentially  every  one of  the  legacy  wells  have been  out  of                                                              
compliance  with Alaska  regulations at  one time  or another  and                                                              
most  still are.  She thought  these wells  would also  be out  of                                                              
compliance   with   federal  regulations   on   proper   plugging,                                                              
abandonment  and cleanup,  but  she found  that  whatever the  BLM                                                              
decides  needs  to be  done  is what  is  needed.  So, they  don't                                                              
really hold anyone, including themselves, to any standards.                                                                     
                                                                                                                                
She showed  a picture  of a well  that was  drilled to  4,000 feet                                                              
but  was  only  cased  down  to  800  feet  explaining  that  they                                                              
encountered oil  and gas  in the open-hole  section, but  left the                                                              
well filled  with drilling fluids  and open to the  atmosphere; it                                                              
had no  wellhead. Most  likely over  time that  open hole  section                                                              
sloughed in and  closed off, but there is no guarantee  that it is                                                              
a  secure well  instead  of a  landmine.  In the  summer  it is  a                                                              
hazard  for  children and  animals;  it  could  also be  a  poison                                                              
hazard.                                                                                                                         
                                                                                                                                
3:43:55 PM                                                                                                                    
The  Simpson  Cortez  well  is  a  different  kind  of  mess,  Ms.                                                              
Foerster  said.  It is  a  natural seep,  but  the  well has  been                                                              
leaking natural  gas from  its permitted  wellhead for  quite some                                                              
time. A  few years  ago BLM got  approval from  the AOGCC  to plug                                                              
and  abandon it,  but  instead of  properly  plugging  it per  the                                                              
AOGCC approved  procedure, they pumped  some cement down  and then                                                              
walked  away, but without  a cement  retainer  for that cement  to                                                              
land on there  is no guarantee  of where it went.  Without tagging                                                              
it or doing a pressure  test, one has no idea what  kind of a seal                                                              
it is.                                                                                                                          
                                                                                                                                
3:45:05 PM                                                                                                                    
SENATOR  DYSON  asked if  there  is data  on  how  the casing  was                                                              
cemented to the formation on any or all of these wells.                                                                         
                                                                                                                                
MS. FOERSTER replied  it has been difficult to get  that data, she                                                              
had received  it last month and  was looking at every  single well                                                              
in great detail - and she was very troubled with some of them.                                                                  
                                                                                                                                
3:45:34 PM                                                                                                                    
SENATOR FRENCH joined the committee.                                                                                            
                                                                                                                                
MS. FOERSTER  exclaimed that  what the BLM  did fell way  short of                                                              
the state's regulatory  requirements and what the  AOGCC gave them                                                              
approval to  do. What they  did created such  a mess that  it will                                                              
be hard to get  back in and fix it correctly.  They complain about                                                              
the cost of fixing  things, but when they do stuff  like this they                                                              
are their own worst enemy.                                                                                                      
                                                                                                                                
She  showed  another  picture  of  rusting  barrels  -  some  with                                                              
"hazardous"  stamped  on them  -  that have  all  rusted open  and                                                              
whatever it  was has leached  into the  ground. The BLM  says they                                                              
don't  have  sufficient  funds  to  go  out  and  clean  up  these                                                              
hundreds of  rusting barrels,  but they have  a big  enough budget                                                              
to rent an expensive  helicopter every year and send  staff out on                                                              
camping trips to take pictures.                                                                                                 
                                                                                                                                
Another  well was  left  filled with  diesel  instead of  drilling                                                              
fluid, a  fluid the U.S. government  won't let people use  in some                                                              
of  their  oil  field  operations   anymore,  because  it  is  too                                                              
hazardous, and  after more  than 50 years  of snow melt  and fluid                                                              
swapping that diesel  has probably leached out  with the hazardous                                                              
fluid that was in those barrels.                                                                                                
                                                                                                                                
3:48:31 PM                                                                                                                    
MS.  FOERSTER  said  some  of  these  pictures  have  appeared  in                                                              
publications  opposing ANWR  development and  the oil industry  is                                                              
blamed for  them. And  when the  BLM shows  a total disregard  for                                                              
the laws  of the State  of Alaska they  make it difficult  for her                                                              
to go to  the regulated industry  and ask them to  hold themselves                                                              
to a different standard.                                                                                                        
                                                                                                                                
Another  well was  drilled  in 1947  and  her  picture showed  the                                                              
debris  still there.  She  exclaimed again  that  these wells  are                                                              
health and safety  hazards and a blatant violation  of the state's                                                              
regulations.                                                                                                                    
                                                                                                                                
SENATOR MICCICHE  asked if the State  of Alaska has  the authority                                                              
to act on the worst wells and then bill the federal government.                                                                 
                                                                                                                                
MS. FOERSTER  replied  that the  feds wouldn't  mind if the  state                                                              
did the work, but  we couldn't send them the bill,  and looking to                                                              
the future of Prudhoe  Bay and Kuparuk she didn't  want to set the                                                              
precedent of cleaning  up operators' messes for them.  To be fair,                                                              
she said the  Alaska BLM folks would  like to clean this  mess up,                                                              
but they  don't get  a sufficient  budget from  the Department  of                                                              
the Interior to do anything meaningful.                                                                                         
                                                                                                                                
Her next  picture was of  one of 17  wells that the  United States                                                              
Geological  Survey (USGS)  was using  for temperature  monitoring;                                                              
they are  old wells with all  kinds of debris:  dangerous cellars,                                                              
old  wellheads,   hundreds  of  pilings,  shacks,   and  piles  of                                                              
drilling mud and other waste.                                                                                                   
                                                                                                                                
3:53:33 PM                                                                                                                    
CHAIR GIESSEL said  slide 5 had a pink color around  a pond filled                                                              
with debris  and asked  if the pink  stuff was  the kind  of algae                                                              
that eats oil  and if the pond  was possibly being used  as a test                                                              
site.                                                                                                                           
                                                                                                                                
MS. FOERSTER  replied probably  not. The whole  area is  known for                                                              
natural  seeps, so  that probably  was oil eating  algae,  but the                                                              
barrels,  the metal  coiling  and the  wood  and the  rest of  the                                                              
debris didn't get there naturally.                                                                                              
                                                                                                                                
3:55:11 PM                                                                                                                    
Another picture  was of  Barrow's whistling  well, which  she said                                                              
the  BLM recognizes  as high  priority and  their plan  is "if  we                                                              
ever get money, we will fix this."                                                                                              
                                                                                                                                
3:57:30 PM                                                                                                                    
SENATOR FRENCH  asked if the BLM has  the money to do  this and is                                                              
just refusing to spend  it to clean it up or do  they not have the                                                              
money.                                                                                                                          
                                                                                                                                
MS. FOERSTER  answered that  the federal  government has  a choice                                                              
of where  to spend  its money  and it's  an allocation  issue. So,                                                              
resolutions like this are needed to go to Congress.                                                                             
                                                                                                                                
3:58:07 PM                                                                                                                    
SENATOR FRENCH asked if they are waiting for Congress to act.                                                                   
                                                                                                                                
MS. FOERSTER answered  that the BLM needs to ask  Congress for the                                                              
money, but she has been told that they are encouraged not to.                                                                   
                                                                                                                                
SENATOR  FAIRCLOUGH  said  since  first talking  to  Ms.  Foerster                                                              
about this  issue, she has  waited for  three years and  now could                                                              
be the time to take it to court.                                                                                                
                                                                                                                                
MS. FOERSTER  said the  state may  end up there,  but the  BLM has                                                              
said they will  get money to clean  up some of the worst  wells in                                                              
the next three years.                                                                                                           
                                                                                                                                
SENATOR  FAIRCLOUGH said  Alaska has  waited long  enough and  she                                                              
would  be happy to  get together  with the  Attorney General  (AG)                                                              
and Representative  Millett. She would also like CNN  to pick this                                                              
story up.                                                                                                                       
                                                                                                                                
4:00:58 PM                                                                                                                    
MS. FOERSTER  said the  Governor's office was  aware of  the issue                                                              
and she wanted him to take the lead on getting the AG involved.                                                                 
                                                                                                                                
SENATOR FAIRCLOUGH  suggested  that Chair  Giessel write  a letter                                                              
on behalf  of the Senate  Resources Committee  to the  AG inviting                                                              
him to  talk about  options for reaching  a compromise  outside of                                                              
court prior to filing an action against the federal government.                                                                 
                                                                                                                                
CHAIR GIESSEL said, "Consider it done."                                                                                         
                                                                                                                                
4:02:11 PM                                                                                                                    
SENATOR  BISHOP  said  these  wells  are also  a  hazard  to  snow                                                              
machines and  asked if Ms.  Foerster had  written a letter  to the                                                              
Secretary of the Department of the Interior.                                                                                    
                                                                                                                                
MS.  FOERSTER answered  that  she had  been  to Washington,  D.C.,                                                              
with  Representative  Millett a  couple  of  times and  they  were                                                              
shunted down a few  levels with assurances, but the  AOGCC had not                                                              
personally sent a letter to Ken Salazar.                                                                                        
                                                                                                                                
4:03:36 PM                                                                                                                    
REPRESENTATIVE  MILLETT  said  she   had  sent  a  letter  to  the                                                              
Secretary  of the  Interior and  had  tried talking  to Kim  Elton                                                              
when he  was with there;  her staff had  reached out to  about 140                                                              
environmental  groups but  they  wouldn't engage.  She added  that                                                              
Senator Lisa  Murkowski had  a meeting  with Secretary  Salazar in                                                              
which this  issue was brought up  and in her  confirmation hearing                                                              
to  the  Energy Council  Sally  Jewel  said  she would  work  with                                                              
Alaska and the AOGCC  on how to best clean up  these wells. People                                                              
from  the villages  in the  NPR-A tell  her they  won't let  their                                                              
children  go  swimming  anywhere  these  wells  because  of  their                                                              
unhealthy condition.                                                                                                            
                                                                                                                                
SENATOR  MICCICHE  remarked that  Alaska  has  the folks  who  can                                                              
clean up the  wells and maybe we  could work out a trade  with the                                                              
federal government,  since  its cash strapped,  for 25-50  percent                                                              
of  OCS (Outer  Continental Shelf)  revenues  in the  future.   He                                                              
asked if this is common in other remote western states.                                                                         
                                                                                                                                
MS.  FOERSTER answered  that  the  BLM doesn't  operate  a lot  of                                                              
other  wells in  other states.  Her counterparts  in other  states                                                              
say they have similar problems but not on Alaska's scale.                                                                       
                                                                                                                                
SENATOR  DYSON said  the  history of  this  issue is  interesting.                                                              
When the  U.S. Navy  transitioned from sail  to steam  they looked                                                              
throughout  the world  for coaling  stations as  part of  national                                                              
security  and that's  when  Homer  got picked  up  because of  its                                                              
seeps. He asked when they quit doing that.                                                                                      
                                                                                                                                
MS. FOERSTER  said the last  one was in 1982.  They did it  in two                                                              
or three chunks: some after WWII and then in the 60s and 70s.                                                                   
                                                                                                                                
4:09:46 PM                                                                                                                    
MS. FOERSTER continued  if these wells were being  operated by any                                                              
oil company,  she would  force compliance  with state  regulations                                                              
and impose hefty  fines for non-compliance. But  the companies out                                                              
there are  not acting  this way and  unfortunately while  they can                                                              
find  the federal  government to  be in  violation of  regulations                                                              
they can't do anything  to make them comply. BLM  brought a lawyer                                                              
to one of  their public hearings  a while ago to inform  them that                                                              
it is  their legal  opinion that the  federal government  can come                                                              
into our  state at  any time and  go anywhere  and violate  any of                                                              
our regulations.                                                                                                                
                                                                                                                                
4:11:27 PM                                                                                                                    
She said the BLM's reported plans for 50 wells were to:                                                                         
                                                                                                                                
     Prepare  a  determination  of  eligibility  pursuant  to                                                                   
     section 106  of the  National Historic Preservation  Act                                                                   
     (NHPA) due  to the age of  this site (50 wells).  If the                                                                   
     site  is not eligible,  then the  surface debris  should                                                                   
     be  removed as  funding allows  or  in conjunction  with                                                                   
     other scheduled operations if possible.                                                                                    
                                                                                                                                
The BLM  had said that was  just "inartful" wording.  Another nine                                                              
wells were  listed as historic  sites and  on which they  had done                                                              
all  they  were going  to  do  "in accordance  with  an  agreement                                                              
established with the Alaska State Historic Preservation Office."                                                                
                                                                                                                                
4:12:57 PM                                                                                                                    
SENATOR FRENCH  asked if anyone  had read what the  agreement with                                                              
the State Historic Preservation Office (SHPO) says.                                                                             
                                                                                                                                
MS. FOERSTER  said there isn't  any agreement; the  State Historic                                                              
Preservation  Officer said she  does not  have that authority  and                                                              
would  never  tell them  not  to  clean  up.  Section 106  of  the                                                              
National Historic Preservation Act says:                                                                                        
                                                                                                                                
     Prior to removal  and cleanup of the well,  the BLM will                                                                   
     determine  if  the site  is  eligible for  the  National                                                                   
     Historic  Register   in  consultation  with   the  State                                                                   
     Historic   Preservation   Office.   If   the   site   is                                                                   
     determined not  eligible, BLM will make a  finding of no                                                                   
     historic  property  is affected  and  commence with  the                                                                   
     proposed  removal clean  up. If the  site is  determined                                                                   
     eligible   this  determination   in  no  way   precludes                                                                   
     removal  cleanup  activities.   Rather  in  consultation                                                                   
     with SHPO the  BLM will mitigate the action  most likely                                                                   
     through  historic documentation  and  then proceed  with                                                                   
     the proposed removal clean up action at the site.                                                                          
                                                                                                                                
MS.  FOERSTER reasoned  that BLM  had been  telling her  something                                                              
about an  agreement that didn't  exist and she thought  maybe they                                                              
were a little confused.                                                                                                         
                                                                                                                                
4:15:01 PM                                                                                                                    
BUD  CRIBLEY, State  Director,  Bureau  of Land  Management,  U.S.                                                              
Department  of the  Interior,  Anchorage,  Alaska, apologized  for                                                              
not  being at  the committee  hearing  but  wasn't able  to get  a                                                              
flight to  Juneau due to last  minutes scheduling. So,  he offered                                                              
to read his statement into the record as follows:                                                                               
                                                                                                                                
     I appreciate  this opportunity  to provide  you with  an                                                                   
     update  on  the  BLM's  Legacy  Wells  clean-up  program                                                                   
     since  my  comments  to the  House  Resources  Committee                                                                   
     last month.                                                                                                                
                                                                                                                                
     The BLM recognizes  the importance of cleaning  up these                                                                   
     well  sites.  As  you  know,  since  2002,  the  Federal                                                                   
     government  has spent  almost  $86 million  in  plugging                                                                   
     legacy  wells and cleaning  up the  surface at  priority                                                                   
     legacy  well  sites.  We  have   plugged  18  wells  and                                                                   
     remediated  contaminated  soils   where  necessary  with                                                                   
     that funding.                                                                                                              
                                                                                                                                
     In  the last  several  weeks, we  have  been working  to                                                                   
     finalize  the Legacy Wells  Summary Report 2013  update.                                                                   
     This    update   has   been    prepared   following    a                                                                   
     comprehensive  site by  site inventory.  A draft of  the                                                                   
     report  was   provided  to   the  Alaska  Oil   and  Gas                                                                   
     Conservation Commission  (AOGCC), the Alaska  Department                                                                   
     of   Environmental   Conservation,  the   Arctic   Slope                                                                   
     Regional   Corporation  (ASRC)   and  the  North   Slope                                                                   
     Borough and  the U.S. Geologic Survey. I  understand the                                                                   
     AOGCC  has prepared  comments  that  will come  our  way                                                                   
     shortly.  We   welcome  their  review  and   input.  The                                                                   
     summary  report,   once  finalized,  will  be   used  to                                                                   
     complete  a strategic  plan  for addressing  well  clean                                                                   
     up. The strategic  plan will document our  goals for the                                                                   
     program  and identify  actions  necessary for  "closure"                                                                   
     of all legacy wells in the NPR-A.                                                                                          
                                                                                                                                
     As  you are all  too well  aware, the  cost of  plugging                                                                   
     these  wells  is  compounded  by  their  remoteness  and                                                                   
     inaccessibility  for most  of the year.  Ice roads  must                                                                   
     be developed  to move equipment  and gear to set  up on-                                                                   
     site camps  adequate to shelter workers  in temperatures                                                                   
     as  cold as  minus forty.  Provisions and  fuel must  be                                                                   
     constantly   resupplied   and   daylight   is   limited.                                                                   
     Specialized    equipment   must   be   winterized    and                                                                   
     transported on  sleds for what can be hundreds  of miles                                                                   
     from  Deadhorse, the  principal  road accessible  supply                                                                   
     depot.                                                                                                                     
                                                                                                                                
4:18:40 PM                                                                                                                    
     Regarding the SHPO issue, much has been said in the last                                                                   
     few weeks about the BLM's process of consulting with the                                                                   
     State Historic Preservation Office regarding legacy well                                                                   
     sites that are more than 50  years old. I want to assure                                                                   
     you that this is part of our normal environmental review                                                                   
     process, and is not expected to  result in any delays in                                                                   
     accomplishing  clean-up  work. In  addition,  historical                                                                   
     significance in and of itself does not preclude plugging                                                                   
     or cleanup and  is considered well in advance  of on the                                                                   
     ground activities.                                                                                                         
                                                                                                                                
     Regarding  Simpson well  26, on  a picture of  which has                                                                   
     been widely circulated at meetings on this issue, I would                                                                  
     like to  make a few  clarifying points. What you  see in                                                                   
     this picture is a well that was drilled in a natural oil                                                                   
     seep. That well was plugged by  the BLM in 2006. The oil                                                                   
     you  see is from  the natural seep  and not  from leaks.                                                                   
     Surface solid  waste clean-up still  must occur,  but is                                                                   
     logistically difficult. During  plugging operations back                                                                   
     in 2006, the tundra was  snow covered and workers at the                                                                   
     site were unable to  see and retrieve the barrels. Other                                                                   
     surface debris has been removed from the site. The BLM's                                                                   
     Arctic  Field Office  is  planning to  focus on  surface                                                                   
     remediation   projects   during  the   2013/2014   field                                                                   
     seasons,  and   this  site  is  identified   as  a  high                                                                   
     priority.                                                                                                                  
                                                                                                                                
     We appreciate  and share your concern about  the need to                                                                   
     address  the   legacy  wells  issue.  The   BLM  remains                                                                   
     committed  to seek  funding  to properly  address  those                                                                   
     sites  that pose a  threat to  public health and  safety                                                                   
     and  the  environment  and  to conduct  our  work  in  a                                                                   
     fiscally  responsible manner. We  will continue  to work                                                                   
     collaboratively  with  the AOGCC,  Native  Corporations,                                                                   
     Tribal  governments, and  other  partners including  the                                                                   
     ASRC  as we  prioritize well  clean-up  projects in  the                                                                   
     strategic plan and during the clean-up efforts.                                                                            
                                                                                                                                
     Thank  you again  for  the  opportunity to  address  you                                                                   
     today. I will be glad to answer any questions.                                                                             
                                                                                                                                
4:20:23 PM                                                                                                                    
SENATOR  DYSON said  he appreciated  Mr. Cribley's  participation.                                                              
He didn't  create the problem  and is having  to try and  solve it                                                              
under difficult  circumstances. He  asked if  the BLM has  to obey                                                              
the same regulations  in terms of building ice roads  and so on as                                                              
the private sector does.                                                                                                        
                                                                                                                                
MR.   CRIBLEY  answered   that   whenever   the  Bureau   conducts                                                              
operations  on the  North Slope,  it has  to go  through the  same                                                              
permitting processes as private individuals do.                                                                                 
                                                                                                                                
SENATOR  DYSON  asked what  they  do if  they  haul  soil off  for                                                              
remediation  in  the   Prudhoe  Bay  unit  where  it   has  to  be                                                              
incinerated.                                                                                                                    
                                                                                                                                
MR.  CRIBLEY replied  that  it depends  on  circumstances and  the                                                              
material's location.  They try to  figure out the cheapest  way to                                                              
stabilize those  materials in  a certified  manner either  on site                                                              
by removing and  transporting them to another  location outside of                                                              
the  NPR-A  that is  certified  for  disposal  of those  types  of                                                              
materials.                                                                                                                      
                                                                                                                                
4:22:57 PM                                                                                                                    
SENATOR FAIRCLOUGH  asked if records are available  to Alaskans on                                                              
remediated dirt disposal from any well.                                                                                         
                                                                                                                                
MR. CRIBLEY replied yes; it is in their office records.                                                                         
                                                                                                                                
SENATOR FAIRCLOUGH  asked when the state's attorneys  contact him,                                                              
if they would be able to get those records to see what was done.                                                                
                                                                                                                                
MR. CRIBLEY  replied yes  and in  fact that kind  of work  has not                                                              
been  done in  a vacuum;  it  has been  a  cooperative process  in                                                              
recent history.                                                                                                                 
                                                                                                                                
SENATOR  FAIRCLOUGH asked  who he  communicates with:  the DNR  or                                                              
the AOGCC.                                                                                                                      
                                                                                                                                
MR.  CRIBLEY replied  that the  surface remediation  work is  done                                                              
working with the  Department of Environmental  Conservation (DEC);                                                              
more specific down-hole issues are worked on with the AOGCC.                                                                    
                                                                                                                                
SENATOR FAIRCLOUGH  said  she still remains  concerned that  these                                                              
are  not legacy  wells in  the sense  that  there is  any kind  of                                                              
legacy  about them,  and the  historical designation  makes it  so                                                              
that any landowner  in the area is unable to do  anything on their                                                              
property. So,  the process  that the  federal government  seems to                                                              
be using to identify  mass cleanup is to make it so  no one can do                                                              
anything else around it.                                                                                                        
                                                                                                                                
4:25:41 PM                                                                                                                    
MR. CRIBLEY  replied that won't  be the situation in  dealing with                                                              
the   cleanup  of   these  wells.   As  part   of  their   federal                                                              
requirements and  regulations they have to recognize  the NHPA and                                                              
the 106  process, which requires  BLM to provide an  inventory and                                                              
assessment  of  those  sites.  Then based  on  that,  they  either                                                              
mitigate or if it's  determined not to be eligible,  they go ahead                                                              
and clean  up. He  didn't think  anything would  come out  of that                                                              
process that  would prohibit cleanup  activities. They  go through                                                              
a routine  NEPA process  whether  they are dealing  with state  or                                                              
federal operations  and it is primarily an issue  of documentation                                                              
of what is on that site before they clean it up.                                                                                
                                                                                                                                
MR. CRIBLEY  said the  BLM has had  informal discussions  with the                                                              
state SHPO  and is ready  and willing to  work with him  on moving                                                              
forward and cleaning these sites up.                                                                                            
                                                                                                                                
SENATOR FAIRCLOUGH  said she appreciated  the effort to  clean up,                                                              
but what she was  disappointed in was using a  federal registry to                                                              
try to  block oil and  gas exploration  on the North  Slope, which                                                              
is what  appears to  be happening.  She hoped  they could  write a                                                              
letter  to the  Attorney General  and  see what  actions with  the                                                              
misuse of historical preservation they might advocate for.                                                                      
                                                                                                                                
4:28:51 PM                                                                                                                    
SENATOR  FRENCH remarked  that the  BLM had spent  $86 million  on                                                              
this  project  already  and  asked the  estimated  price  tag  for                                                              
completing the job.                                                                                                             
                                                                                                                                
MR. CRIBLEY  answered that  he hadn't formulated  a total  cost to                                                              
complete the  job. Right now they  have a copy of the  legacy well                                                              
summary report  that identifies the  situation with the  136 wells                                                              
and the  only partner  who has  not responded  back is  the AOGCC.                                                              
When they get those  comments, they will sit down  and decide what                                                              
work needs  to be  done and  incorporate that  into the  strategic                                                              
plan they  are trying  to finalize  right now.  They will  develop                                                              
the final cost from that.                                                                                                       
                                                                                                                                
SENATOR FRENCH asked when the $86 million was spent.                                                                            
                                                                                                                                
MR. CRIBLEY replied  that the money was spent from  2002 up to the                                                              
present.                                                                                                                        
                                                                                                                                
SENATOR FRENCH  asked if he  anticipated spending money  next year                                                              
and the year after that to continue the effort.                                                                                 
                                                                                                                                
MR. CRIBLEY replied  that there is a small amount  of money in the                                                              
President's  FY13  budget  to  do  surface  cleanup,  but  he  was                                                              
waiting for the FY14 budget to be released for a further update.                                                                
                                                                                                                                
4:31:34 PM                                                                                                                    
SENATOR FRENCH  asked how much was  appropriated in 2013  for this                                                              
effort.                                                                                                                         
                                                                                                                                
MR.  CRIBLEY replied  that  about  $1 million  was  set aside  for                                                              
addressing legacy well  issues in 2013. In the  past several years                                                              
they  had been using  a portion  of that  money to  help with  the                                                              
updating  of   the  inventory  and   assessment  of   the  current                                                              
situation with  the wells.  Some of it  has been used  to finalize                                                              
some well cleanup.                                                                                                              
                                                                                                                                
SENATOR FRENCH  asked if he  meant that  $1 million was  the total                                                              
amount appropriated in FY13 for the well cleanup effort.                                                                        
                                                                                                                                
MR.  CRIBLEY  responded  that  $1  million  was  appropriated  for                                                              
legacy wells in FY13.                                                                                                           
                                                                                                                                
SENATOR  FAIRCLOUGH asked  him to  please carry  the message  back                                                              
about targeting more  than one well at a time in  the same area so                                                              
that costs can be minimized.                                                                                                    
                                                                                                                                
4:33:27 PM                                                                                                                    
MR.  CRIBLEY responded  that  their  current strategy  is  exactly                                                              
that:  to "bundle"  a group  of wells  based on  highest risk  and                                                              
leverage  the equipment  in  there  to be  as  efficient with  the                                                              
dollars as possible.                                                                                                            
                                                                                                                                
SENATOR FAIRCLOUGH asked if he uses local Alaskan contractors.                                                                  
                                                                                                                                
MR. CRIBLEY answered  that any work they do is put  out on bid and                                                              
generally  they  go with  the  lowest bidder  or  the  best bid  -                                                              
whatever is most efficient.                                                                                                     
                                                                                                                                
SENATOR FAIRCLOUGH  said she hopes they use Alaskans  who know the                                                              
challenges of working  in minus-40 degrees rather  than just going                                                              
with  the lowest  bid.  She also  hoped that  he  was giving  some                                                              
weighting to folks with experience in cold climates.                                                                            
                                                                                                                                
4:35:46 PM                                                                                                                    
MR.  CRIBLEY  replied that  he  had  been  using a  local  Alaskan                                                              
contractor to  do that work to  date and experience in  working in                                                              
the  Arctic  is  a  factor  in   reviewing  the  bids;  it's  very                                                              
important to them to have that.                                                                                                 
                                                                                                                                
4:36:54 PM                                                                                                                    
REPRESENTATIVE  MILLETT said  she is  frustrated having  continued                                                              
down this  same path year  after year and  having offered  to help                                                              
on   the  cleanup   effort.   Now   the  Arctic   Slope   Regional                                                              
Corporation, by having  land conveyed to them, is  willing to help                                                              
also.                                                                                                                           
                                                                                                                                
4:38:06 PM                                                                                                                    
SENATOR  DYSON said  his experience  with recalcitrant  government                                                              
officials  is to put  their picture  above the  fold on  the front                                                              
page and get media involved.                                                                                                    
                                                                                                                                
REPRESENTATIVE  MILLETT pointed  out  that the  resolve clause  on                                                              
page 3  asks the  governor to get  the word  out by any  available                                                              
means.                                                                                                                          
                                                                                                                                
4:39:56 PM                                                                                                                    
SENATOR MICCICHE  said he was frustrated,  too. At the  very least                                                              
he  would like  to  see the  barrels  collected,  which is  summer                                                              
work, and  reflective permanent  markers installed this  summer so                                                              
they can be seen from a distance.                                                                                               
                                                                                                                                
MS.  FOERSTER added  that the  reason the  AOGCC hasn't  responded                                                              
yet is  because the BLM's  summary report  on the legacy  wells is                                                              
35 pages long and  it takes a while to respond  when they are that                                                              
far  apart  on their  views.  What  really  concerns her  is  that                                                              
several of  these wells have  wellheads on  them and were  left as                                                              
completed,  but some  have pressure  and some  have had leaks.  At                                                              
least  one  has been  tampered  with:  the  valve turned  and  oil                                                              
flowed.  None of  the valves  are  locked, which  is another  high                                                              
priority. BLM  lists only about 10  of the wells as  having medium                                                              
or high  surface risk  and most  of those look  like the  ones she                                                              
just showed  them. She has  a lot of work  to do to give  them her                                                              
feedback.                                                                                                                       
                                                                                                                                
SENATOR  DYSON suggested  they get  some  high quality  reflective                                                              
signs   that   say:   "This   historic   mess   memorializes   the                                                              
incompetence and  hypocrisy of the federal government  in managing                                                              
Alaska's affairs."                                                                                                              
                                                                                                                                
REPRESENTATIVE MILLETT said she would do it.                                                                                    
                                                                                                                                
4:43:05 PM                                                                                                                    
SENATOR FAIRCLOUGH  said they  need to be  flagged as  hazards not                                                              
as historical documentation.                                                                                                    
                                                                                                                                
SENATOR BISHOP  asked about  the Rolligon  operator who  runs over                                                              
the  pressurized wellhead  in the  night  and he's  dead, and  his                                                              
family has no father to care for them. Who is responsible then?                                                                 
                                                                                                                                
REPRESENTATIVE  MILLETT said  those are the  exact questions  they                                                              
have asked  the BLM. It is an  accident waiting to happen  and she                                                              
didn't  know  who  would  be  responsible   or  how  it  would  be                                                              
explained to Alaskan residents.                                                                                                 
                                                                                                                                
CHAIR GIESSEL opened  up public comment, finding  none, she closed                                                              
it.                                                                                                                             
                                                                                                                                
4:44:41 PM                                                                                                                    
SENATOR FAIRCLOUGH moved Amendment 1.                                                                                           
                                                                                                                                
                                                28-LS0300\N.1                                                                   
                                                       Nauman                                                                   
                                                                                                                                
                          AMENDMENT 1                                                                                       
                                                                                                                                
     OFFERED IN THE HOUSE         BY REPRESENTATIVE MILLETT                                                                     
     TO: HJR 6                                                                                                                  
                                                                                                                                
     Page 4, line 8:                                                                                                            
             Delete "the Honorable Mike Pool, Acting"                                                                           
             Insert "Neil Kornze, Principal Deputy"                                                                             
                                                                                                                                
CHAIR GIESSEL  found no objection  and announced that  Amendment 1                                                              
was adopted.                                                                                                                    
                                                                                                                                
SENATOR FAIRCLOUGH  noted that some  legacy wells  are benefitting                                                              
Alaska  and if  the general  public  is listening  they may  think                                                              
that the  bad actor is  someone on the  North Slope that  has been                                                              
benefitting  Alaska  for  years  and  years  and  is  required  to                                                              
report,  be responsible  and accountable  to the  State of  Alaska                                                              
for every drop of oil, and if they are not, face fines.                                                                         
                                                                                                                                
MS. FOERSTER said  she thought the federal government  was using a                                                              
consistent pattern of "inartful working."                                                                                       
                                                                                                                                
4:47:16 PM                                                                                                                    
SENATOR DYSON  moved to report HJR  6, as amended,  from committee                                                              
with zero fiscal note and individual recommendations.                                                                           
                                                                                                                                
CHAIR GIESSEL  announced that, without  objection, SCS  HJR 6(RES)                                                              
passed from the Senate Resources Standing Committee.                                                                            

Document Name Date/Time Subjects
HJR 6 ver. A.pdf SRES 3/25/2013 3:30:00 PM
HJR 6
HJR 6 Sponsor Statement.pdf SRES 3/25/2013 3:30:00 PM
HJR 6
HJR6 LAA Fiscal Note.pdf SRES 3/25/2013 3:30:00 PM
HJR 6
HJR 6 Amendment #1 SRES 2013 03 25.pdf SRES 3/25/2013 3:30:00 PM
HJR 6
HJR6 Foerster presentation 20130322.pdf SRES 3/25/2013 3:30:00 PM
HJR 6
HJR 6 Legacy Well Nat Historic Site Designation 03042013.pdf SRES 3/25/2013 3:30:00 PM
HJR 6
HJR 6 Historic Site Designation Letter Millett 2013 03 05.pdf SRES 3/25/2013 3:30:00 PM
HJR 6
HJR 6 BLM Cribley SRES Testimony 2013 03 25.pdf SRES 3/25/2013 3:30:00 PM
HJR 6
HJR 6 Begich BLM Legacy Wells Letter.pdf SRES 3/25/2013 3:30:00 PM
HJR 6
HJR 6 Petroleum News on Legacy Wells.pdf SRES 3/25/2013 3:30:00 PM
HJR 6
HJR 6 Support Letter RDC.pdf SRES 3/25/2013 3:30:00 PM
HJR 6