Legislature(2021 - 2022)GRUENBERG 120
05/04/2021 10:00 AM House FISHERIES
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| Audio | Topic |
|---|---|
| Start | |
| HB82 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 82 | TELECONFERENCED | |
| + | TELECONFERENCED |
ALASKA STATE LEGISLATURE
HOUSE SPECIAL COMMITTEE ON FISHERIES
May 4, 2021
10:05 a.m.
MEMBERS PRESENT
Representative Geran Tarr, Chair
Representative Jonathan Kreiss-Tomkins
Representative Andi Story
Representative Dan Ortiz
Representative Sarah Vance
MEMBERS ABSENT
Representative Louise Stutes, Vice Chair
Representative Kevin McCabe
COMMITTEE CALENDAR
HOUSE BILL NO. 82
"An Act relating to surface use restrictions for oil and gas
leases; relating to gas leases in Kachemak Bay; relating to the
renewable energy grant fund; and providing for an effective
date."
- HEARD & HELD
PREVIOUS COMMITTEE ACTION
BILL: HB 82
SHORT TITLE: GAS LEASES; RENEWABLE ENERGY GRANT FUND
SPONSOR(s): RULES BY REQUEST OF THE GOVERNOR
02/18/21 (H) READ THE FIRST TIME - REFERRALS
02/18/21 (H) RES, FSH
03/01/21 (H) RES REFERRAL MOVED TO AFTER FSH
03/01/21 (H) BILL REPRINTED
04/06/21 (H) FSH AT 10:00 AM GRUENBERG 120
04/06/21 (H) Heard & Held
04/06/21 (H) MINUTE(FSH)
05/04/21 (H) FSH AT 10:00 AM GRUENBERG 120
WITNESS REGISTER
HALEY PAINE, Deputy Director
Division of Oil and Gas
Department of Natural Resources
Anchorage, Alaska
POSITION STATEMENT: Offered answers to questions during the
hearing on HB 82.
JEREMY PRICE, Commissioner
Alaska Oil and Gas Conservation Commission
Anchorage, Alaska
POSITION STATEMENT: Responded to questions during the hearing
on HB 82.
DAVE ROBY, Senior Reservoir Engineer
Alaska Oil and Gas Conservation Commission
Anchorage, Alaska
POSITION STATEMENT: Responded to questions during the hearing
on HB 82.
SEAN CLIFTON, Policy and Program Specialist
Division of Oil and Gas
Department of Natural Resources
Anchorage, Alaska
POSITION STATEMENT: Responded to questions during the hearing
on HB 82.
ACTION NARRATIVE
10:05:25 AM
CHAIR GERAN TARR called the House Special Committee on Fisheries
meeting to order at 10:05 a.m. Representatives Ortiz, Vance,
Kreiss-Tompkins, Story, and Tarr were present at the call to
order.
HB 82-GAS LEASES; RENEWABLE ENERGY GRANT FUND
10:06:10 AM
CHAIR TARR announced that the only order of business would be
HOUSE BILL NO. 82, "An Act relating to surface use restrictions
for oil and gas leases; relating to gas leases in Kachemak Bay;
relating to the renewable energy grant fund; and providing for
an effective date."
10:08:06 AM
HALEY PAINE, Deputy Director, Division of Oil and Gas,
Department of Natural Resources, brought attention to a handout
in the committee packet with responses to questions asked at the
previous hearing on the bill. She reviewed the first question
and answer on the handout, which read as follows [original
punctuation provided]:
Will this bill increase the potential for leaks?
No. Well engineering is highly regulated by the Alaska
Oil & Gas Conservation Commission (AOGCC)to ensure
wells are safe and will not contaminate surface waters
or drinking water aquifers. Furthermore, leases
granted under this legislation explicitly do not allow
any surface usage, so there would be no possibility of
pipelines, drilling rigs, platforms, or any other sort
of impact to the waters of Kachemak Bay, the sea
floor, or the fisheries.
10:09:44 AM
REPRESENTATIVE VANCE requested that Jeremy Price explain what
the Alaska Oil and Gas Conservation Commission (AOGCC) does in
terms of providing oversight to the wells that are in [the
Kachemak Bay] area and how the proposed legislation "would
change any of that."
10:10:04 AM
JEREMY PRICE, Commissioner, Alaska Oil and Gas Conservation
Commission, responded that AOGCC regulates the permitting and
drilling of oil and gas wells, and HB 82 would not change what
AOGCC does. He said AOGCC's regulations require that the well
casings and cementing programs in place by the operator contain
fluids within the well bore and there is no migration of fluids
from one stratum to another. Any well pressures that are
encountered are controlled by primary means with drilling fluids
or by secondary means with blowout prevention equipment. He
said hydrocarbon zones are protected so the hydrocarbons do not
migrate outside of their respective strata. When wells are
drilled, surface casing is set in place below any aquafers or
drinking water sources, and then the surface casing is cemented
from the shoe to the surface so that there are at least two
barriers protecting those drinking water sources.
10:11:37 AM
REPRESENTATIVE VANCE stated one area of concern is the Anchor
River and aquifer, and she asked what AOGCC does to protect that
water.
10:12:20 AM
DAVE ROBY, Senior Reservoir Engineer, Alaska Oil and Gas
Conservation Commission, responded that AOGCC regulates and
monitors its wells for the entire lifespan of the wells. He
said AOGCC requires a safety valve installed on any well that
could flow to the surface unassisted and that is within one-
eighth of a mile of navigable water, roadways, or houses, for
example. The valves are tested twice a year. He concluded,
"So, there's lots of provisions in place to ensure that the
wells are sound, and they won't leak in the unlikely event that
something does happen."
REPRESENTATIVE VANCE asked how AOGCC ensures there is no
interference with the water when doing subsurface drilling.
MR. ROBY answered that AOGCC would review the proposed well's
trajectory to ensure the well is properly constructed to endure
any geological condition it may encounter. In response to a
follow-up from Representative Vance relating a concern about
seismic activity, he said he is not aware of seismic monitoring;
however, he said through AOGCC's monitoring of the well, it can
tell whether "something has happened down ... the hole."
REPRESENTATIVE VANCE voiced constituent concern that seismic
activity may cause a disruption with subsurface drilling that
would not be seen readily. She asked if there was seismic
monitoring that would alert to potential danger.
MR. ROBY answered that he was not aware of [any such
monitoring]; however, he reiterated that monitoring of the well
would indicate whether something has happened "down the hole."
10:15:27 AM
SEAN CLIFTON, Policy and Program Specialist, Division of Oil and
Gas, Department of Natural Resources, in response to
Representative Vance, said he had never heard of any seismic
activity disrupting any of the wells in the Cook Inlet where
there was subsurface drilling. He said AOGCC would know if
earthquakes were effecting well integrity. He said if the
question is about development drilling and other related
activities causing seismic activity, the only place he has heard
of that occurring is in Oklahoma, and he said that is "fairly
unique in terms of geology." He indicated that in the Kenai
Peninsula, the issue is volcanic, and "there's no way that
drilling is impacting that."
10:16:43 AM
MR. PRICE pointed out that drilling has been occurring in Cook
Inlet since the 1960s, and AOGCC's standards currently in place
are "quite robust," especially compared to those from 60 years
ago. He concluded that AOGCC does not see any threat regarding
seismic activity and drilling operations.
REPRESENTATIVE VANCE explained her questions come from her
constituents and their concern for the water in Kachemak Bay and
Anchor River.
10:18:22 AM
CHAIR TARR suggested the continued discussion focus on
mitigation measures related to drilling.
10:18:53 AM
MS. PAINE directed attention to part of the aforementioned
handout addressing "Mitigation Measures," which includes a link
to the 2018 Cook Inlet Best Interest Finding. Chapter 9 of the
finding addresses mitigation measures in place, including
restrictions related to facilities, times of year for
activities, and how to handle or contain "fluids or muds"
resulting from exploration activities. She said the handout
addresses spill prevention, detection, and response, with
clarification provided by the Alaska Oil and Gas Conservation
Commission (AOGCC). The handout also addresses fish and
wildlife uses and values, and any reasonably foreseeable effects
of leasing and subsequent activity. She recalled Representative
Vance had, at a prior meeting, voiced questions regarding
legislatively designated areas and critical habitat, and she
noted that a provided map is marked to address that question.
MS. PAINE, regarding directional drilling, pointed to a question
addressed on the handout as to whether Section 1 of HB 82 would
"contemplate directional drilling." She explained that for this
particular location, while the drilling envisioned was vertical,
the bill would allow for directional drilling from an onshore
location without any surface restrictions to somewhere that had
the surface restrictions in place.
10:21:27 AM
MR. PRICE noted that directional drilling is quite common in
Alaska.
10:22:02 AM
MR. ROBY expressed that approximately 95 percent of wells
drilled in Alaska are directionally drilled, so there is an
understanding of how to drill them safely and operate them
properly.
10:22:29 AM
CHAIR TARR mentioned ocean floor topography and vertical
drilling. She questioned whether it could be possible to drill
vertically onshore and then reach from there into protected
waters of Kachemak Bay.
MR. ROBY answered that it would depend on the rig used, but
directional drilling can reach out about seven miles, minus the
distance from shore where the rig is placed.
CHAIR TARR asked for clarification of whether that could mean
drilling could reach the protected area in Kachemak Bay, which
she explained is a concern she has been hearing from
constituents.
10:24:27 AM
MS. PAINE offered her understanding that the directional
drilling would take place far below the sea floor; there would
be no pipeline through the water of Kachemak Bay. She noted
that nearby [drilling] was at a depth of 5,500 feet of "true
vertical depth."
10:25:29 AM
REPRESENTATIVE ORTIZ asked for confirmation that the drilling
being discussed as well below the water would be in the area of
the protected waters.
10:25:54 AM
MS. PAINE prefaced her answer by stating her understanding that
it is the water [of Kachemak Bay] that is the protected area;
there would be no entry authorization into that area with
drilling in the subsurface. She continued:
However, there are, potentially, hydrocarbon regions -
specifically gas - that are located deep, deep below
the seabed floor that could be accessed from the
nearby unrestricted land in a way that wouldn't go
into or ... impact the protections in place for the
fisheries in the area in that location.
REPRESENTATIVE ORTIZ confirmed that answered his question.
10:27:11 AM
REPRESENTATIVE KREISS-TOMKINS asked whether there was other oil
and gas activity adjacent to legislatively designated areas
elsewhere in Alaska where horizontal or directional drilling
could occur under Section 1 of HB 82.
10:28:02 AM
MS. PAINE answered that currently the only area statutorily
closed for oil and gas leasing is Kachemak Bay. Other areas
have different designations in place, such as addressing a
different type of mineral owner or federal lands. She described
Section 1 as offering "forward thinking" to address any area
legislatively protected in the future, so that the ability to
access minerals in those areas would not be closed to DNR, if
the minerals could be indirectly accessed from a nearby,
unrestricted location.
10:28:52 AM
REPRESENTATIVE KREISS-TOMKINS concluded that this language was
more prospective and would preempt any confusion about the
ability to do directional drilling [adjacent to] areas the
legislature may designate in the future.
MS. Paine confirmed that is correct.
10:29:22 AM
REPRESENTATIVE STORY asked whether horizontal, subsurface
drilling had been done under protected land anywhere else in
Alaska and whether there had been "any effects that had happened
in other places."
10:29:52 AM
MS. PAINE said that "page 4-4" of a map in the Cook Inlet Best
Finding document depicts all critical habitat areas and "other
sort of legislative designated areas." She said, "We are
currently compatible in terms of our oil and gas activities and
include any surface restriction in the mitigation section of
chapter nine." She reiterated her comment to Representative
Kreiss-Tomkins that there are no other "statutorily closed state
... mineral areas that we have [as] an example to point [out] to
you at this time."
REPRESENTATIVE STORY clarified that she wanted to know whether
there are examples of ill-effects of horizontal drilling
anywhere in the world.
10:30:54 AM
MS. PAINE echoed the remark of [Mr. Roby] that 95 percent of
wells drilled in Alaska have a "directional component," and she
said that "we have a very successful track record in terms of
safety and protecting our environment."
10:31:34 AM
CHAIR TARR announced that HB 82 was held over.
10:31:50 AM
ADJOURNMENT
There being no further business before the committee, the House
Special Committee on Fisheries meeting was adjourned at [10:32]
a.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB 82 Sponsor Statement 1.28.21.pdf |
HFSH 4/6/2021 10:00:00 AM HFSH 5/4/2021 10:00:00 AM HFSH 2/1/2022 11:00:00 AM |
HB 82 |
| HB 82 Version A 2.18.21.PDF |
HFSH 4/6/2021 10:00:00 AM HFSH 5/4/2021 10:00:00 AM HFSH 2/1/2022 11:00:00 AM |
HB 82 |
| HB 82 Sectional Analysis - Version A 2.23.21.pdf |
HFSH 4/6/2021 10:00:00 AM HFSH 5/4/2021 10:00:00 AM HFSH 2/1/2022 11:00:00 AM |
HB 82 |
| HB 82 Fiscal Note One - DNR-DOG 1.27.21.pdf |
HFSH 4/6/2021 10:00:00 AM HFSH 5/4/2021 10:00:00 AM HFSH 2/1/2022 11:00:00 AM |
HB 82 |
| HB 82 Supporting Document - Gas Leases-Renewable Energy Grant Fund Presentation - DNR 4.6.21.pdf |
HFSH 4/6/2021 10:00:00 AM HFSH 5/4/2021 10:00:00 AM HFSH 2/1/2022 11:00:00 AM |
HB 82 |
| HB 82 Supporting Document - Committee Followup by DNR 4.23.21.pdf |
HFSH 5/4/2021 10:00:00 AM HFSH 2/1/2022 11:00:00 AM |
HB 82 |
| HB 82 Testimony Received by 5.4.21.pdf |
HFSH 5/4/2021 10:00:00 AM HFSH 2/1/2022 11:00:00 AM |
HB 82 |
| HB 82 Updated - Testimony Received by 5.4.21.pdf |
HFSH 5/4/2021 10:00:00 AM |
HB 82 |