Legislature(2011 - 2012)HOUSE FINANCE 519
02/17/2011 01:30 PM House FINANCE
| Audio | Topic |
|---|---|
| Start | |
| Discussion: Federal Regulatory Issues Affecting Economic Development in Alaska | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE FINANCE COMMITTEE
February 17, 2011
1:34 p.m.
1:34:35 PM
CALL TO ORDER
Co-Chair Stoltze called the House Finance Committee meeting
to order at 1:34 p.m.
MEMBERS PRESENT
Representative Bill Stoltze, Co-Chair
Representative Bill Thomas Jr., Co-Chair
Representative Anna Fairclough, Vice-Chair
Representative Mia Costello
Representative Mike Doogan
Representative Bryce Edgmon
Representative Les Gara
Representative David Guttenberg
Representative Reggie Joule
Representative Mark Neuman
Representative Tammie Wilson
MEMBERS ABSENT
None
ALSO PRESENT
Edward S. Itta, Mayor, North Slope Borough; Rex A. Rock
Sr., President and CEO, Arctic Slope Regional Corporation;
Daniel S. Sullivan, Commissioner, Department of Natural
Resources; John J. Burns, Attorney General, Department of
Law; Senator Donny Olson; Representative Bob Herron.
SUMMARY
^DISCUSSION: FEDERAL REGULATORY ISSUES AFFECTING ECONOMIC
DEVELOPMENT IN ALASKA
1:35:51 PM
EDWARD S. ITTA, MAYOR, NORTH SLOPE BOROUGH, explained to
the committee that federal regulatory issues significantly
affected his community. He noted that he was an Inupiaq
Eskimo born and raised in Barrow and was a lifelong whaler
and hunter. He communicated urgency regarding the issue. He
recalled people who had gone before.
Mr. Itta gave the following statement (taken in part from
"Discussion of Federal Regulatory Issues Affecting Economic
Development in Alaska," copy on file):
I'm grateful for the chance to speak with you this
afternoon, because the topic of federal regulation is
one in which the state's interests and the borough's
are almost in complete alignment. I think this fact
has been largely overlooked in the noise of occasional
moments of real or perceived disagreements we may
have.
So I'd like to set the record straight by touching on
three issues that are at the top of our list when it
comes to development: the National Petroleum Reserve-
Alaska (NPR-A), the Endangered Species Act (ESA), and
offshore development. I should start by saying that
for us, resource development and economic development
are one and the same. We don't have commercial fishing
or timber or much tourism.
1:42:11 PM
The economic development in our region and communities
is all driven by oil and gas activity, so we are even
more dependent on resource development than the state.
At the same time, the North Slope residents understand
that the cash economy and the subsistence economy are
now interdependent. As a whaling captain, I need a
snow machine and oil and gas for fuel. I need a boat
to fill my ice cellar with fish and caribou. We need
economic development to sustain our subsistence way of
life.
These are important realities for me as I think about
the future of our communities along the Arctic coast.
I worry about the economic future of my people and
communities at the same time that I worry about the
future of our bowhead whaling tradition. I ask myself,
"Is there a way that the nation's energy needs, the
state of Alaska's revenue needs, and our local economy
and the ancient whaling practices and subsistence
traditions that guide our Inupiaq culture can be
accommodated in the Arctic?"
I have decided that the answer is "Yes." Together with
the state and with industry, we have already proven
that multiple uses can be accommodated onshore. I
don't think it's a secret that we've been working
successfully with the oil industry with regards to
Prudhoe Bay and other nearby developments for well
over 30 years. We have protected our land and our
animals. Now we share the same frustrations over the
roadblocks that stand in the way of the few remaining
new onshore prospects. The 1002 area of the Arctic
National Wildlife Refute (ANWR) appears to be a lost
cause, because environmental groups have successfully
made it a rallying point for saving the polar bear and
the caribou, of which there are only about half a
million roaming around the North Slope.
You'd think that a petroleum reserve would have a
somewhat lower barrier to entry, but what's happening
in NPR-A is starting to look like a stealth version of
the ANWR experience. The bridge over the river channel
to Conoco's CD-5 development is the gateway to
expansion to NPR-A from the east. That project went
through a very difficult process that finally resulted
in an agreement everyone could agree with-the company,
the community, and the regional and village
corporations that have title to the lands in the area.
Then at the 11th hour, the Corps of Engineers stopped
the project in its tracks by denying a final permit,
which was disappointing. I met with agency officials
in Washington [D.C.] several times, from Secretary
Salazar on down, trying to get CD-5 back on track. We
didn't immediately achieve our goal, but I do believe
that Conoco will ultimately get access across that
river channel. I just hope they're going to stick
around long enough to do it. I worry about that.
But here is the real challenge: As a diverse group of
stakeholders, can we work together closely enough so
the CD-5 experience is not repeated? We cannot allow
NPR-A to become another 1002 area, since it is the
only remaining untapped North Slope acreage that has
not been walled off by a refuge designation. The North
Slope Borough can be an effective ally in this effort,
but we really need to have more and better
communication with and leadership from the State.
Attorney General Burns and Commissioner Sullivan, we
commend you for taking the immediate steps to come up
and work with us; that is a great beginning. We are
discussing how we can coordinate the message, but up
until now, the State's interest in what we can bring
to the table has been really low. Unless there's a
relationship through which we can craft an appropriate
message together, we are missing out on our best shot
at future onshore development.
1:49:17 PM
One way in which the borough is trying to help is
through our involvement as a cooperating agency in the
current process for creating a new Integrated Activity
Plan for NPR-A with the Bureau of Land Management.
This is the context in which we've heard about this
new type of designation put out by the Department of
Interior called "wild lands." The "wild lands" idea
has the fingerprints of environmental non-governmental
organizations (NGOs) all over it, and it could lead to
large areas of NPR-A being set aside for consideration
as wilderness areas. The North Slope Borough has never
been afraid to engage in planning and permitting. The
kicker with wild lands is that any lands set aside for
consideration under the category will be managed as
wilderness until a determination is made. That was
part of our reason for going to Washington, D.C. We
could end up with a lot of de facto wilderness area in
NPR-A if that program goes forward.
This is another one where all stakeholders need to
have a united approach and a united message, which is
only possible as a result of healthy and consistent
communication. So it's real clear: our future is tied
in to pipeline throughput. By communicating, that's
how we will know where the sticking points are for
each stakeholder, so that we can work together to
accommodate our respective concerns. When we're up
against these powerful federal agencies, we have to do
a lot more than blame and complain. That is why one of
my points has been to always talk and discuss and go
with dialogue, versus filing lawsuits, which do not in
the end accomplish much. We've got to play to our
strengths by presenting a united front that recognizes
the core concerns of industry, the State, the North
Slope Borough, tribal governments, and local
residents. Another example of that is the effort by
the legislature to put together the Northern Waters
Task Force. I think a lot of the issues have been
noticed by that committee and are in the handout
materials that I have given you. I commend the
legislature for creating that task force.
We create a united front by capitalizing on our areas
of agreement. I think we have a lot more in common
than we have differences. I want to move forward with
those. There are many, and by working on them side by
side, we develop a level of trust that allows us to
work through issues where we may not have complete
agreement, and that is quite okay.
We've done this on the North Slope with ESA listings.
The North Slope Borough and the Arctic Slope Regional
Corporation (ASRC) look at the world through different
prisms, because our organizational missions are
different. But we've recently been talking about the
consequences of multiple species being listed in the
Arctic.
The ESA scenarios that may confront us are in fact
pushing us onto common ground, although we sometimes
get there on different paths. When it comes to ESA
listings, the borough's mandate for community
development makes us very nervous about the potential
effects of listings on things like Kaktovik's need to
build a new runway. The agency promised us that the
critical habitat area for polar bears would not
include our villages, but when the maps were released,
three of our villages were totally encompassed in the
middle of critical habitat.
1:54:51 PM
ASRC is equally concerned about the likelihood of
critical habitat designations stifling development
opportunities. So we joined together in announcing our
intent to sue the government over the critical habitat
designation for the polar bear. The regional tribal
organization, the Inupiat Community of the Arctic
Slope (ICAS), joined with us in this case, because we
all share a deep concern for the future of our
subsistence hunting activities under the thumb of the
federal regulators. It came as no surprise to us that,
in early discussions of a polar bear recovery plan,
the first item favored by most NGOs was to limit the
subsistence take of polar bears. The most direct
impact was on us. We have been conservationists of the
polar bear from time immemorial. We did not cause
global warming. And what happens? 188,000 square miles
get designated critical habitat, an area the size of
the state of California, without even so much as a,
"Hey, what do you think about this?" Talk about
overreach. This is very real, the effect on us, and
this is just the polar bear. There is also the walrus,
the ringed seal, the bearded seal. I commend ASRC and
President Rock for the efforts that are being made on
coming together as a region and recognizing that our
problem is common to the state. It comes from
different directions, but we all have the underlying
concern about something that we value very deeply, and
that is our subsistence traditions.
I mention this because I see parallel opportunity for
industry, the State, the borough, and others to come
together so that Alaskans can benefit from offshore
development and have a meaningful voice in federal
decisions that affect us all. This situation is an
opportunity for all of us to engage so that offshore
development can happen, if it's going to happen.
For example, there is nothing preventing oil produced
offshore from being tankered to market instead of
processed onshore and fed into the pipeline. The North
Slope Borough has been an advocate on the federal
level to push for pipelines for tankers. I have not
heard the State say anything about that. That's an
area where we need help, where we want to be engaged.
Tankering out of the Beaufort seems unlikely, due to
geography, but the Chukchi is a different story. If it
leaves by tanker, the State gets no economic benefit,
or very little; few jobs are created, and we've got
tankers potentially plowing through Arctic ice day in
and day out. I think it's a bad deal all around, and
that's why I've been promoting a federal requirement
for pipelines to shore on all Outer Continental Shelf
(OCS) oil production for the past two years.
1:59:14 PM
In fact, I have developed a set of eight OCS policy
points that I've been shopping around in D.C. since
the spring of 2009. They are included in the handouts
you should have. I've also been meeting with Pete
Slaiby and the folks at Shell quite a bit, trying to
sell them on these issues. To Shell's credit, they
have engaged with us extensively, and we've now got
agreement on a number of these policy points,
including discharge into our oceans of the mud and
cuttings, drilling fluids, grey water; they have
agreed to barge that and inject it. We recently signed
a joint science agreement with Shell that will ramp up
baseline science in the Arctic, focusing on issues of
concern to local residents. This program is a mutual
agreement and it does not delay exploration, but in
fact supercharges the baseline science effort, which
is to everyone's best interest. A copy of that
agreement is also in your packet.
Shell has come a long way toward addressing the most
critical concerns of our communities, sometimes even
above and beyond the federal requirements. In fact
Pete Slaiby has told me that he will work with us to
reach our goal on most of those eight policy points.
So I was disappointed after our meetings with the
Environmental Protection Agency (EPA) a few weeks ago,
when they did not issue that last permit, which kept
Shell out of the water for this summer. I worry that
the good relationships and the serious discussions we
have had with Shell might stop. It took a lot of
effort to get where we are with Shell. I think Shell
has earned the right to start their exploration
program. I think they have earned the right; they have
accommodated a lot of our concerns.
If by chance you ever heard me speak about OCS
development during my first term as mayor, then what
you're hearing from me today may come as a surprise.
You see, Pete Slaiby and I may disagree on plenty of
things, but we have decided that we can get closer to
our respective goals by engaging and building trust
than we can by duking it out in court or going our
separate ways and leaving all the decisions to federal
agencies. That is not in our best interest, nor is it
in Shell's.
By the same token, the State and the borough may not
agree on everything, but I look at that as a reason
for more dialogue, not less. When it comes to these
big rule-making processes on NPR-A, the ESA, or OCS
issues, we all lose if we are not working together.
These next statements are not easy for me, but I
believe they need to be said.
Where has the State been in these negotiations and
rulemaking tussles that we've been engaged in? Where?
For all practical purposes, the State has not been an
effective advocate, except to say they support
development and oppose anything that slows that
process. I do not make this comment to you casually,
but after much consideration. I believe it needs to be
said. And I am not only referring to the current
administration. To use our failed conversations on the
Alaska Coastal Management Plan (ACMP) as an example:
Is that a reason to not continue discussions? I don't
know.
2:05:56 PM
It is not realistic to talk exclusively about
economics in the context of proposed development, nor
is it effective. It sends a message that the State is
not really interested in engaging. The federal
government has an obligation to protect Alaska
Natives. My suggestion is that the State broaden its
vocabulary so that it is talking about issues like OCS
in comprehensive terms that include impacts to coastal
communities. This one-track approach is causing the
state to bypass opportunities and to miss out on the
kinds of new ideas that spring from a collaborative
process.
You'll recall how in the late 1960s and early 1970s,
the State had an oil field at Prudhoe Bay, but no
access for a pipeline. It took a meeting of the minds
among diverse interest groups to overcome that extreme
challenge. I believe offshore development is similar,
while different, but again, today it holds substantial
challenges for a diverse collection of interests. How
did they accomplish a pipeline? This is a very similar
time.
Will the State of Alaska willingly join together in
pursuit of a common goal this time around? I hope so,
because that is how we Alaskans will be able to get
the best results for our state and our people across
the board. We can create scenarios where multiple
interest groups win, but they must be founded on
mutual trust, which grows out of honest and open and
continuous communication.
REX A. ROCK SR., PRESIDENT AND CEO, ARCTIC SLOPE REGIONAL
CORPORATION, acknowledged ASRC personnel present. He
commended Mr. Itta, and noted that he was also a whaling
captain; through that, they had learned to work together
with people across the North Slope, and he thought others
could learn from their example for the good of the state.
(His testimony was taken in part from a February 17, 2011
prepared statement, "Written Testimony of ARCTIC SLOPE
REGIONAL CORPORATION," copy on file).
ASRC is Alaska's largest Alaskan-owned company, with
approximately 10,000 employees nationwide, of which
approximately 4,000 are Alaskan jobs. ASRC represents
11,000 Inupiat shareholders of Alaska's North Slope
region, and we have been successful in striking a
balance between representing the business interests
with the subsistence and cultural needs of our
shareholders. ASRC has five major business lines: 1)
energy support services, 2) petroleum refining and
marketing, 3) government services, 4) construction,
and 5) resource development.
Any changes in the regulatory climate will have an
impact on our family of companies and the communities
within which we do business. Simply put, a bad federal
regulatory climate will hurt Alaska's economy.
There are several overreaching federal policies that
aim to lock up Alaska's North Slope from oil and gas
development, or that have a chilling effect on
business investment opportunities in the Arctic.
My written comments include a summary by agency of how
this pressure is harming our region, and I ask that
they be accepted for the record. The federal agencies
include the U.S. Department of the Interior, the
Environmental Protection Agency, and the National
Oceanic and Atmospheric Administration. My oral
comments will focus on the land- and ocean-based
policies affecting our region.
Under the auspices of the "Great Outdoors Initiative,"
the Obama Administration has put extreme pressure on
our communities, region and State.
As you know, the U.S. Department of the Interior,
using the Endangered Species Act, recently set aside
an area larger than the state of California as
critical habitat for polar bears. Further, they are
planning to set aside additional areas on the North
Slope potentially covering millions of acres both on-
and off-shore. In fact, the polar bear critical
habitat designation covers 3.6 million acres of
onshore area alone. Significant efforts are underway
by the Administration to designate vast areas of our
homeland as wild lands within NPR-A; there is
consideration of National Monument or Wilderness
status for places like ANWR. These threaten the
responsible resource development that we depend upon
for community survival and a safe, sustainable
economy.
This concerns ASRC, and should concern all lawmakers.
Earlier this week the President released his budget
and it included $15 million for the Bureau of Land
Management's National Landscape Conservation System,
including special areas, such as designated
Wilderness, Wilderness Study Areas, National
Monuments, and National Conservation Areas.
Millions of acres on the North Slope are already
locked up as Wilderness, National Parks or similarly
restrictive status, and these efforts threaten to
"paint us into a corner" within our own region. This
danger is made worse by the current production decline
faced by the Trans Alaska Pipeline System. With most
prospective areas on-shore either off-limits or at
risk of becoming off-limits, we are unable to offset
the dramatic production decline of the existing
oilfields. This decline is not just a lingering tail
of decreasing production, but will become a "brick
wall" when the pipeline reaches its mechanical limits
and is unable to move production.
For North Slope communities, this represents a clear
and present danger. We have no other economy in our
region. We ask ourselves, how will our grandchildren
clear snow from the roads, maintain our schools, and
operate the real world infrastructure that makes our
villages safe and viable into the future without
development opportunities?
Those of us who have served in the North Slope Borough
government need no explanation when the news discusses
Alaska's dependence on the oil and gas industry. Our
villages are at the "tip of the spear" on this issue.
Decline in production equates to a decline to our
well-being as the people of the North Slope.
2:14:32 PM
Our analysis suggests that there is no positive
benefit to these sweeping designations. In fact, we
see the initiatives and federal over-reach as a
numbers game; the Administration wants more
'wilderness areas' designated and Alaska has become
the easy target for the agencies to meet an unstated
goal. Animal species do not recognize boundaries, and
the "wildness" of our lands already exists in
abundance.
This is not only an issue of the onshore; with
proposed 'Marine Spatial Planning' we will see a
similar 'carve up' of our oceans. The Oceans Policy
Task Force needs to include vital stakeholders from
the North Slope into the Coastal and Marine Spatial
Planning process. Changes in our coastlines and off-
shore areas could negatively impact our traditional
subsistence and economic opportunities.
As we step back and take a long-range view, what we
really see are efforts that will lead to the
extinction of our communities and lifestyles on the
North Slope while protecting areas and species that
science says do not need protections at this time. We
are being attacked by the federal government; and to
what purpose? The areas being set aside or proposed to
be set aside have no access; chances of large portions
of the American public ever viewing these areas are
remote.
Our message that we are delivering as loudly as we can
is that we live on lands that we did not spoil, among
species whose numbers we did not threaten, backed
against an ocean whose resources we can measure but
not develop.
We have always been a hard-working and resilient
people, taught by our elders to be as self-sufficient
as possible, working together. Looking back at
testimonies regarding development as far back as
several generations, our people have always wanted to
be involved and a part of the solution rather than
standing on the sidelines and watching.
We have used resource development to better our
communities and avoid excessive dependence on federal
social programs. Now, in an era when Alaska's Native
people are accused of over dependence on federal
programs, the same federal government is essentially
pulling the rug out from under us and taking away the
ability to fulfill the intent of the Alaska Native
Claims Settlement Act (ANCSA). Onshore and offshore,
designations will take away the tools and ability
promised us to improve our quality of life in our
region. There is a certain irony that the federal
government is scrutinizing Alaska Native Corporations
within the federal procurement system while removing
the opportunities promised to us through our land and
resource entitlement of ANCSA.
Thank you for the opportunity to provide you with this
information today. On behalf of ASRC, I look forward
to working with you to progress this state into the
future.
2:18:20 PM
DANIEL S. SULLIVAN, COMMISSIONER, DEPARTMENT OF NATURAL
RESOURCES, opined that discussing the issues in the panel
was symbolic of the way the department wanted to proceed.
He referenced his travels and meetings with people all over
the state, including Barrow. He agreed that the areas of
common interests far outweighed areas of differences, and
that a united approach was attainable.
Commissioner Sullivan provided a PowerPoint presentation,
"Alaska Department of Natural Resources: Federal Regulatory
Issues Affecting Economic Development in Alaska, 2/7/11"
(copy on file). He pointed to Alaska's statutory policy
embedded in the constitution of maximizing resource
development within the public interest (Slide 2):
· Article 8, Section 1 of the Alaska Constitution
provides that "it is the policy of the State to
encourage the settlement of its land and the
development of its resources by making them available
for maximum use consistent with the public interest."
· Article 8, Section 2 provides that the "legislature
shall provide for the utilization, development, and
conservation of all natural resources belonging to the
State, including land and waters, for the maximum
benefit of its people."
· AS 38.05.180(a) provides that "the people of Alaska
have an interest in the development of the state's oil
and gas resources to maximize the economic and
physical recovery of the resources; maximize
competition among parties seeking to explore and
develop the resources; maximize use of Alaska's human
resources in the development of the resources"
Commissioner Sullivan turned to Slide 3 ("Top Priority:
Arresting TAPS Decline") with a line graph showing the
steady decline of barrels of oil per day produced through
the Trans Alaska Pipeline System (TAPS), with further
decline projected from 2010 to 2025. He emphasized that the
projections did not have to be Alaska's destiny, but that
partners were needed ("Importance of Partnership," Slide
4):
· Overcoming challenges hinges on partnership
· Federal Government moving from protecting environment
to proactively shutting-down resource development
· Recent federal decisions have delayed or vetoed
critical projects
Commissioner Sullivan believed the missing partner was the
federal government. He believed the federal government had
been moving from a policy of protecting the environment to
actively opposing resource development. He referred to
remarks by a senior EPA official implying that Alaskan's
frustrations were "just politicians making cheap points."
He asserted that the frustrations voiced by many Alaskans
were the basis of a long list of very specific resource
development projects that the federal government was
working to shut down in the state.
Commissioner Sullivan directed attention to a map on Slide
5, "State Lands: Surrounded by Feds") that illustrated how
state land was surrounded by federal land, including the
NPR-A, ANWR, the 1002 Area, and the OCS. He stated that the
area remained a world-class hydrocarbon basin, with 40
billion barrels of recoverable oil and 236 trillion cubic
feet of gas (according to the U.S. Geological Survey). He
claimed that there had been many delays and vetoes that
made addressing the throughput more difficult (Slide 6,
"Specific Development Plans Delayed or Vetoed"):
· CD-5
· OCS Exploratory Drilling
· OCS Moratorium
· Point Thomson EIS Delays
Commissioner Sullivan noted that Mayor Itta had addressed
the CD-5; he emphasized that there had been different
stakeholders working for years at the behest of the U.S.
Army Corps of Engineers to come together on agreement. When
agreement was finally reached, the corps "pulled the rug
out from under us," which he believed was directed by the
EPA. He thought it ironic that the approach recommended by
the EPA and corps (an underground pipeline under the river,
rather than a bridge) was more environmentally risky.
Commissioner Sullivan referred to OCS permitting delays and
a moratorium, as well as Point Thomson environmental impact
statement (EIS) delays.
2:25:33 PM
Commissioner Sullivan addressed "Broader Policies
Jeopardizing Future Development" (Slide 7):
· NPR-A Wildlands
· ANWR National Monument
· ANWR Wilderness Designation
· ESA - Polar Bear Critical Habitat Designation
Commissioner Sullivan detailed that the policies would have
a specific affect on Alaska's ability to develop its
resources. He thought the wild lands policy was an
"executive approach to an end run around federal statutes"
with regard to what could be designated wilderness. He
noted that the governor had sent a letter to the President
on the importance of not allowing the ANWR National
Monument. The U.S. Fish and Wildlife Service was
considering an ANWR wilderness designation; comments had
been requested for the designation for the 1002 area, but
they specifically said that the comments could not include
oil and gas development. He referred to a letter sent
stating that several federal laws had been violated.
Commissioner Sullivan stated concerns that the polar bear
critical habitat designation would open up the possibility
of being sued by environmental groups for any activity with
a federal nexus, which he believed would cause delays and
put off investment decisions.
Commissioner Sullivan emphasized the irony of the federal
policies; not only would they hurt Alaska, but the federal
government was charged with enhancing and securing national
security, energy security, job security, and environmental
security. He believed security would be undermined by the
anti-development policies.
Commissioner Sullivan spoke to "Solutions" (Slide 8):
· Re-double efforts with Obama Administration
· Act as a cooperating agency
· Educate public about shut-downs and delays
· Encourage congressional action
· Last resort: Litigation
Commissioner Sullivan opined that the key to all solutions
related to establishing partnership among Alaskans. He
admitted that there were a few examples of helpfulness by
the federal government. For example, the EPA had played a
"relatively constructive" role when an environmental group
had worked to shut down the Red Dog Mine.
2:29:39 PM
Commissioner Sullivan believed that actions were often
taken in the name of protecting the environment. However,
he felt that when Alaska resource development was shut
down, overseas resource development was encouraged,
resulting in the import of Russian crude oil, increasing
the country's trade deficit, compromising national
security, and supporting a country with much less stringent
environmental standards.
JOHN J. BURNS, ATTORNEY GENERAL, DEPARTMENT OF LAW,
provided a PowerPoint presentation, "Alaska Department of
Law, Federal Regulatory Issues Affecting Economic
Development in Alaska 2/17/11" (copy on file [continuation
of the Department of Natural Resources PowerPoint]). He
agreed with the importance of Alaskans finding common
ground and building relationships to resolve issues.
Attorney General Burns believed there was a misconception
that Alaska was anti-federal government. He believed the
relationship between the state and the federal government
was symbiotic in many areas, including strategic military
operations and energy resource availability. He opined that
the relationship should be more symbiotic, based on the
volume of hydrocarbons available in Alaska. He thought the
federal government's policy regarding resource development
had an element of uncertainty that jeopardized resource
development and the future of the TAPS throughput.
Attorney General Burns felt that recent federal regulatory
policies underscored a concerted effort to significantly
restrict, if not preclude, future development within
Alaska. He emphasized that the regulations being set forth
were on federal lands, which comprised roughly 60 percent
of the entire state. However, he argued that Alaska had a
significant interest, because it shared in a revenue stream
from development. He continued that federal regulations
were significantly impacting development on state lands;
most recently the U.S. Army Corps of Engineers and EPA
stopped development of CD-5 and were stopping construction
of the Tanana River Bridge crossing in Fairbanks. He argued
that additionally, ESA listings and habitat designations
were significantly impacting development in Cook Inlet and
the OCS.
2:34:08 PM
Attorney General Burns expressed frustration that the
federal government's apparent attitude was that Alaskans
were not competent enough to know what was in their
collective best interest or that they did not care enough.
He stated that there was a difference between conservation
and preservation. He defined conservation the "wise use of
a resource" and preservation as "locking it up." He thought
Alaska was a resource extraction state. He believed
resource development was vitally important to the thriving
of all communities, including the North Slope Borough,
Juneau, and Anchorage.
Commissioner Burns maintained that Alaska needed a
comprehensive strategy. He recalled his visit to the North
Slope Borough. The state had just filed a notice of intent
to sue related to the polar bear listing. Mayor Itta had
said that he shared the attitude, but he asked, "Why didn't
you call us and talk to us before you sent it out?" He
stated that he would not make the mistake again. He
emphasized the importance of communicating first, and then
speaking with one voice.
Attorney General Burns directed attention to Slides 14
through 17, related to the ESA:
· Comprehensive Strategy
o Challenging unwarranted listings
o Challenging unwarranted critical habitat
designations
· Listings and designations can affect
o Shipping
o transportation
o oil and gas development
o mining
o commercial, sport and subsistence fishing and
hunting
· Listing petitions
o Polar bears
o Beluga whales in Cook Inlet
o Steller sea lions
o Humpback whales
o Pacific walrus
o Seals (ringed and bearded)
o SE Alaska Pacific herring
· Critical Habitat Designations
o Polar bear
o Cook Inlet Beluga whale
· Pending Lawsuits and appeals
o Polar bears
o Beluga whales
o Steller sea lions
o Humpback whales
o Ribbon seals
· Threatened lawsuits
o State's notice of intent to sue to challenge
187,000 square miles of critical habitat
designation for polar bear
Attorney General Burns emphasized that all the listings,
lawsuits, and threatened lawsuits would restrict the
ability to develop.
Attorney General Burns directed attention to a pie chart on
Slide 18 ("ESA FY11 Budget Expenditures") depicting the
nearly $1.4 million cost of litigation on various issues:
· Wood Bison, $10,560
· Humpback Whales, $16,110
· Ribbon Seals, $43,137
· Ringed and Bearded Seals, $10,000
· Pacific Walruses, $20,000
· General ESA Advice, $17,000
· Western Steller Sea Lions, $574,305
· Eastern Steller Sea Lions, $18,500
· Polar Bears, $241,776
Attorney General Burns noted that communities had also
spent a significant amount of money. He stressed that the
federal regulations being implemented cost a tremendous lot
of money to defend, and that a strategy was needed. He
underlined that the objective was not litigation, but to
engage early on and to engage together.
2:38:46 PM
Attorney General Burns referenced the CD-5 project (Slide
19, "Assisting DNR and DEC in requesting prompt federal
review of NPR-A challenges"), noting that all stakeholders
had been united on the issue:
· Challenges to petroleum exploration in the National
Petroleum Reserve-Alaska (NPR-A)
o Clean Water Act wetlands fill permit for CD-5
project
Attorney General Burns reviewed Slide 20, "Advising DNR on
response to BLM Wilderness and 'Wild Lands' designations":
· Interior Secretary Salazar ordered the evaluation of
72 million+ acres of federal land in Alaska for
wilderness characteristics, potentially allowing
federal government to create de-facto wilderness in
Alaska without congressional oversight
o Affects permitting and right of way
determinations
o Changes the multiple use mandate otherwise
applicable to BLM lands
Attorney General Burns turned to Slide 21:
· U.S. Fish and Wildlife Service revised the Arctic
National Wildlife Refuge (ANWR) Comprehensive
Conservation Plan, evaluating wilderness
o Dept. of Law provided legal advice to Governor
who wrote President Obama urging him to respect
ANILCA
Attorney General Burns detailed that the lawsuit had cost
Alaska $36,000. He had received a call from a Texas
reporter who asked whether the lawsuit had been a waste of
money, since the case was lost. Attorney General Burns had
responded that Alaska lost as soon as the case was filed,
but the case had to be filed to respond to a statement made
by U.S. Interior Secretary Salazar. The Department of Law
was unable to correct the confusion and had to file a
lawsuit. The federal government was unequivocal that there
was no moratorium.
Attorney General Burns moved to "Assisting DEC's request
for prompt EPA action on Shell's Clean Air Act permit
application" (Slide 23):
· Environmental Appeals Board (EAB) remanded Shell's
application for further work
· EAB questioned EPA's analysis of impacts of nitrogen
dioxide emissions from drill ships
· Shell now postponing plans to drill exploratory
wells this summer
Attorney General Burns detailed that in the Shell
situation, the federal delegation was united in condemning
the decision by EPA to delay the project again.
Attorney General Burns addressed "Challenges and
Opportunities" (Slide 24):
· Support--as legally appropriate--responsible resource
development
o Develop a comprehensive long term development
strategy
ƒEndangered Species Act
· Unwarranted listings
· Unwarranted designations of critical
habitat
ƒOuter Continental Shelf exploration
· Challenges when warranted
ƒClean Air and Water Acts
· Challenges when warranted
Attorney General Burns stressed the importance of acting in
a cooperated approach involving the legislature, the
administration, all the agencies, as well as
municipalities, boroughs, Native corporations and tribes,
industries, and other attorneys general from throughout the
country.
Attorney General Burns concluded that the destiny of Alaska
was to reverse the course of declining throughput and to
take advantage of the opportunities to aggressively pursue
responsible resource development.
2:42:28 PM
Mr. Itta pointed to handouts that had been given to the
committee. In particular, he emphasized a handout from a
DOL attorney with a summary valuation on the Coastal Zone
Management Plan, and the eight policy points. He stated
that he would continue to be at the table on behalf of his
people for the rest of his life.
Mr. Rock noted that additional materials would be sent to
the committee.
Co-Chair Thomas commended the panel and the work done
together. He believed coastal zone management should be in
the hands of the regions.
Representative Joule hoped there was appreciation for what
had been said by the North Slope Borough and ASRC visitors.
He acknowledged the difficulty of making some of the
statements, with regards to OCS and the position of the
North Slope Borough and ASRC related to the people they
represent. He emphasized that the statements were the
result of years of working together with the industry.
Representative Joule referred to the story of David and
Goliath, with Goliath being the federal government and
David being the state. He pointed out that David had a
weapon that he used effectively; he believed that was the
opportunity the state had before it as it moved forward
with the discussion of responsible development in Alaska.
Representative Joule emphasized that Native Alaskans could
be an asset for the state in working with the federal
government. He thought the way forward would be an easier
path; he noted that the extended hand had been there. He
acknowledged that there were challenges, but argued that
there had always been challenges. He stressed that we do
not know our potential, and that was the promise: to unlock
it with the people that we have, to use all of us as
resources and assets in order to move forward to a common
destiny.
Representative Joule believed the forum fit in with
responsible resource development and bridging the distances
in order to get to the goal.
2:50:25 PM
SENATOR DONNY OLSON thanked the committee for the
opportunity to express the views of the northern
communities.
Representative Edgmon queried the possibility of a larger
role for tribal governments in the partnership effort.
Attorney General Burns replied that the communities were
gathering to identify the common issues. He stated that the
state would engage and figure out opportunities to
emphasize and expand upon in order to presented a united
voice.
REPRESENTATIVE BOB HERRON spoke to the acknowledgement of
the Northern Waters Task Force and noted four legislators
present who were working closely on the issue. He reported
that the task force would have a letter to all legislators
soon about the issues being addressed. He spoke in support
of more direct communication. He referred to a story told
by Commissioner Sullivan about interfacing with the EPA on
the Pump Station 1 shutdown. He queried the importance of
forcing conversation with the federal government.
Commissioner Sullivan responded that he believed there were
different opportunities; one was for everyone to engage
with the federal government and communicate the
frustration. He thought there was a desire for partnership
both for Alaskans and federal officials. He opined that
community members like Mr. Itta and other Native Alaskans
engaging with the federal government was good.
2:55:59 PM
Representative Herron retold the story of the commissioner
going face-to-face with the EPA at the pump station.
Commissioner Sullivan responded that the EPA had not wanted
to grant permission to restart TAPS; he did not think the
EPA had the authority to make the call. He believed
disagreement had to be expressed forcefully, but he wanted
to convince them to cooperate.
Representative Neuman asked when development in Point
Thomson would move forward and create jobs. Commissioner
Sullivan responded that the department was focused on
trying to settle the Point Thomson matter between the
working interest owners and the state. He warned the
process could take time, but not from lack of effort or
focus.
Representative Gara commended the work done by Mayor Itta,
particularly in keeping the balance between building
alliances and litigating. He reported that he had wanted to
write an angry letter when the U.S. Army Corps of Engineers
had denied the permit to build the bridge across the
Colville River. He queried the status of development plans
in NPR-A, especially at Teshekpuk Lake. Mr. Itta replied
that initial discussions about the area resulted in an
agreement that there was to be a ten-year moratorium on the
northern part of Teshekpuk for biological studies related
to fish and calving grounds. He had been satisfied with the
agreement. However, the latest attempt was to make a wild
lands or other designation; he was opposed to more
wilderness designation in the area. He noted that regarding
the CD-5 issue, the North Slope Borough assembly had worked
for three years to come to agreement about what was
acceptable to the people that depend upon the Colville
River. He stressed that the decision was not a light one.
3:01:47 PM
Mr. Itta pointed to the contradictions of the federal
government issuing edicts and mandates on one hand, and
then changing direction after the community followed the
directives. He stated that it was a tough place to be. He
wondered whether anyone knew what was really going on. He
argued for a strong and united voice. He did not want to be
saved. He noted that his father had an allotment at the
west end of Teshekpuk Lake and he had an allotment at the
east end. His family had the connection from time
immemorial. He cared what happened in the area. He referred
to the ASRC land lock-up, with a dramatically large area.
He thought common sense had been lost somewhere.
Representative Doogan surmised that he had heard that the
state of Alaska might be insufficiently involved in some
issues that were important to the people of the North Slope
and to Alaskans as a whole. He hoped the situation had been
remedied and that there would not be a problem in the
future.
Co-Chair Thomas announced that the co-chairs had decided to
hire a veteran's caucus employee to support the veterans of
Alaska. The hired person was a captain who had had two
tours to Iraq.
Co-Chair Stoltze acknowledged the contributions of the
panel.
3:06:50 PM
AT EASE
3:11:38 PM
RECONVENED
ADJOURNMENT
The meeting was adjourned at 3:11 PM.
| Document Name | Date/Time | Subjects |
|---|---|---|
| dnr-dept of law Fed Regs 021711pdf.pdf |
HFIN 2/17/2011 1:30:00 PM |
|
| NSB Coastal Zone Management Planning, State Consistency Determinations and the Endangered Species Act 2.16.11.pdf |
HFIN 2/17/2011 1:30:00 PM |
|
| NSB House Finance NSB Power Point 2-17-11 (Final).pdf |
HFIN 2/17/2011 1:30:00 PM |
|
| Arctic Slope Reg. Corp maps.pdf |
HFIN 2/17/2011 1:30:00 PM |
|
| ASRC Letter to Salazar.pdf |
HFIN 2/17/2011 1:30:00 PM |
|
| ASRC Press.pdf |
HFIN 2/17/2011 1:30:00 PM |
|
| Itta PresentationFedIssuesHFINsp0211v3.docx |
HFIN 2/17/2011 1:30:00 PM |
|
| Testimony Rex Rock Pres. Arctic Slope Reg. Corp..pdf |
HFIN 2/17/2011 1:30:00 PM |
|
| NSB Shell Research Agreement.pdf |
HFIN 2/17/2011 1:30:00 PM |
|
| NSB Policy Positions Oil & Gas.pdf |
HFIN 2/17/2011 1:30:00 PM |
|
| Great Outdoors Exec Summary-ASRC.pdf |
HFIN 2/17/2011 1:30:00 PM |