Legislature(1993 - 1994)

02/07/1994 05:00 PM House O&G

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
              HOUSE SPECIAL COMMITTEE ON OIL & GAS                             
                        February 7, 1994                                       
                            5:00 p.m.                                          
                                                                               
                                                                               
  MEMBERS PRESENT                                                              
                                                                               
  Representative Joe Green, Chairman                                           
  Representative Pete Kott, Vice Chairman                                      
  Representative Harley Olberg                                                 
  Representative Gary Davis                                                    
  Representative Joe Sitton                                                    
                                                                               
  MEMBERS ABSENT                                                               
                                                                               
  Representative Jerry Sanders                                                 
  Representative Jerry Mackie                                                  
                                                                               
  OTHER LEGISLATORS PRESENT                                                    
                                                                               
  Senator Johnny Ellis                                                         
  Senator Jalmar M. Kerttula                                                   
                                                                               
  COMMITTEE CALENDAR                                                           
                                                                               
  HB 199:   "An Act relating to the exploration and production                 
            of oil and gas and related hydrocarbons, to oil                    
            and gas exploration licenses, and to oil and gas                   
            leases in certain areas of the state; and                          
            providing for an effective date."                                  
                                                                               
            ADOPTED HB 199 AND MOVED OUT OF COMMITTEE                          
            WITH INDIVIDUAL RECOMMENDATIONS.                                   
                                                                               
  SJR 13:   Opposing the ban on the export of Alaska North                     
            Slope crude oil; endorsing HR 543, legislation                     
            removing restraints on the export of Alaska North                  
            Slope oil; requesting the Congress of the United                   
            States to pass legislation to permit the export of                 
            Alaska North Slope crude oil; and requesting the                   
            President of the United States to present to the                   
            United States Congress a recommendation to lift                    
            the ban on the export of Alaska North Slope crude                  
            oil.                                                               
                                                                               
            ADOPTED SJR 13.                                                    
                                                                               
  *HB 401:  "An act establishing a procedure for review of                     
            proposed projects under the Alaska coastal                         
            management program, and relating to petitions for                  
            compliance with and enforcement of district                        
            coastal management programs under that program and                 
            to the disposition of those petitions."                            
                                                                               
            ADOPTED HB 199 AND MOVED OUT OF COMMITTEE WITH                     
            INDIVIDUAL RECOMMENDATIONS.                                        
                                                                               
  WITNESS REGISTER                                                             
                                                                               
  DR. PAUL RUSANOWSKI, Director                                                
  Division of Governmental Coordination                                        
  Office of the Governor                                                       
  PO Box 110030                                                                
  Juneau, Alaska 99811                                                         
  Phone:  (907) 465-3562                                                       
  POSITION STATEMENT:  Testified in support of HB 401.                         
                                                                               
  STEVEN PORTER                                                                
  ARCO,  Alaska                                                                
  P.O. Box 100360                                                              
  Anchorage, Alaska 99510                                                      
  Phone:  (907) 265-6269                                                       
  POSITION STATEMENT:  Testified in support of HB 401.                         
                                                                               
  MIKE O'MEARA                                                                 
  P.O.Box 1125                                                                 
  Homer, Alaska 99603                                                          
  Phone: (907) 235-7767                                                        
  POSITION STATEMENT:  He questioned HB 401                                    
                                                                               
  BETH KERTTULA, Assistant Attorney General                                    
  Department of Law                                                            
  Courthouse Building, 6th Floor                                               
  P.O. Box 110300                                                              
  Juneau, AK  99811-0300                                                       
  Phone: (907) 465-6713                                                        
  POSITION STATEMENT:  Testified in support of HB 401                          
                                                                               
  PREVIOUS ACTION                                                              
                                                                               
  BILL:  HB 199                                                                
  SHORT TITLE: OIL & GAS EXPLORATION LICENSES/LEASES                           
  SPONSOR(S): RULES BY REQUEST OF THE GOVERNOR                                 
                                                                               
  JRN-DATE     JRN-PG               ACTION                                     
  03/05/93       549    (H)   READ THE FIRST TIME/REFERRAL(S)                  
  03/05/93       549    (H)   OIL & GAS, RESOURCES, FINANCE                    
  03/05/93       549    (H)   -ZERO FISCAL NOTE (REV) 3/5/93                   
  03/05/93       549    (H)   GOVERNOR'S TRANSMITTAL LETTER                    
  03/15/93              (H)   O&G AT 05:00 PM CAPITOL 124                      
  03/16/93              (H)   O&G AT 08:00 AM CAPITOL 124                      
  03/22/93              (H)   O&G AT 05:00 PM CAPITOL 124                      
  03/22/93              (H)   MINUTE(O&G)                                      
  03/25/93              (H)   O&G AT 05:00 PM CAPITOL 124                      
  03/31/93              (H)   O&G AT 05:00 PM CAPITOL 124                      
  04/06/93              (H)   MINUTE(O&G)                                      
  04/07/93              (H)   O&G AT 05:00 PM CAPITOL 124                      
  04/07/93              (H)   MINUTE(O&G)                                      
  01/13/94              (H)   O&G AT 05:00 PM CAPITOL 124                      
  01/26/94              (H)   O&G AT 05:00 PM CAPITOL 124                      
  01/31/94              (H)   O&G AT 05:00 PM CAPITOL 124                      
  01/31/94              (H)   MINUTE(O&G)                                      
  02/07/94              (H)   O&G AT 05:00 PM CAPITOL 124                      
                                                                               
  BILL:  SJR 13                                                                
  SHORT TITLE: EXPORT OF ALASKA OIL                                            
  SPONSOR(S): SENATOR(S)ELLIS,Kelly,Rieger,Frank,                              
  Leman,Donley,Kerttula,Sharp,Pearce,Little,Duncan,                            
  Phillips,Miller;                                                             
  REPRESENTATIVE(S) Green,Grussendorf,Nordlund                                 
                                                                               
  JRN-DATE     JRN-PG               ACTION                                     
  01/11/93        14    (S)   READ THE FIRST TIME/REFERRAL(S)                  
  01/11/93        15    (S)   RESOURCES, JUDICIARY                             
  03/24/93       933    (S)   COSPONSOR(S):  DONLEY                            
  03/31/93              (S)   RES AT 3:30 PM BUTROVICH RM 205                  
  03/31/93              (S)   MINUTE(RES)                                      
  03/31/93              (S)   MINUTE(RES)                                      
  04/05/93      1100    (S)   RES RPT CS 4DP  NEW TITLE                        
  04/05/93      1100    (S)   ZERO FISCAL NOTE TO SB & CS                      
                              (REV)                                            
  01/21/94              (S)   JUD AT 01:30 PM BELTZ ROOM 211                   
  01/21/94              (S)   MINUTE(JUD)                                      
  01/26/94      2595    (S)   JUD RPT CS 3DP  NEW TITLE                        
  01/26/94      2596    (S)   ZERO FISCAL NOTE TO CS                           
                              PUBLISHED (REV)                                  
  01/26/94              (S)   RLS AT 11:30 AM FAHRENKAMP                       
                              ROOM 203                                         
  01/26/94              (S)   MINUTE(RLS)                                      
  01/28/94      2614    (S)   RULES RPT CS 5CAL AND DP NEW                     
                              TITLE                                            
  01/28/94      2614    (S)   PREVIOUS ZERO FN APPLIES TO CS                   
                              (REV)                                            
  01/28/94      2624    (S)   READ THE SECOND TIME                             
  01/28/94      2625    (S)   RLS  CS ADOPTED UNAN CONSENT                     
  01/28/94      2625    (S)   COSPONSOR(S): KERTTULA, SHARP,                   
                              PEARCE                                           
  01/28/94      2625    (S)   LITTLE,DUNCAN,PHILLIPS,MILLER                    
  01/28/94      2625    (S)   ADVANCED TO THIRD READING                        
                              UNAN CONSENT                                     
  01/28/94      2625    (S)   READ THE THIRD TIME                              
                              CSSJR 13(RLS)                                    
  01/28/94      2626    (S)   PASSED Y16 N- E4                                 
  01/28/94      2626    (S)   Kelly  NOTICE OF                                 
                              RECONSIDERATION                                  
  02/01/94      2642    (S)   RECONSIDERATION NOT TAKEN UP                     
  02/01/94      2643    (S)   TRANSMITTED TO (H)                               
  02/02/94      2212    (H)   READ THE FIRST TIME/REFERRAL(S)                  
  02/02/94      2213    (H)   O&G, RESOURCES                                   
  02/02/94      2230    (H)   CROSS SPONSOR(S):  GREEN,                        
                              GRUSSENDORF                                      
  02/02/94      2230    (H)   CROSS SPONSOR(S):  NORDLUND                      
  02/07/94              (H)   O&G AT 05:00 PM CAPITOL 124                      
                                                                               
  BILL:  HB 401                                                                
  SHORT TITLE: COASTAL ZONE MANAGEMENT PROCEDURES                              
  SPONSOR(S): SPECIAL COMMITTEE ON OIL AND GAS                                 
                                                                               
  JRN-DATE     JRN-PG               ACTION                                     
  01/26/94      2154    (H)   READ THE FIRST TIME/REFERRAL(S)                  
  01/26/94      2154    (H)   O&G, RESOURCES                                   
  02/07/94              (H)   O&G AT 05:00 PM CAPITOL 124                      
                                                                               
  ACTION NARRATIVE                                                             
                                                                               
  TAPE 94-5, SIDE A                                                            
  Number 001                                                                   
                                                                               
  CHAIRMAN JOE GREEN called the meeting to order at 5:04 p.m.                  
  He noted members in attendance.  He noted that Anchorage and                 
  Ketchikan were on-line via teleconference, later to be                       
  joined by Fairbanks and Homer.                                               
  HB 199 - OIL & GAS EXPLORATION LICENSES/LEASES                               
                                                                               
  Number 015                                                                   
                                                                               
  REPRESENTATIVE HARLEY OLBERG moved to adopt the committee                    
  substitute for HB 199.  Hearing no objections, it was so                     
  ordered.                                                                     
                                                                               
  REPRESENTATIVE GARY DAVIS moved to adopt HB 199 with                         
  individual recommendations and with attached fiscal notes.                   
  Hearing no objection, it was so ordered.                                     
                                                                               
  Number 062                                                                   
                                                                               
  SJR 13 - EXPORT OF ALASKAN OIL                                               
                                                                               
  SENATOR JOHNNY ELLIS supported the resolution.  He mentioned                 
  that Alaska has lost about $2.5 billion since the early                      
  1970s, when the two federal acts were imposed on the state.                  
  He further stated the Department of Energy is reviewing the                  
  national pros and cons of lifting the bans and although an                   
  extension is expected regarding re-authorization of the                      
  Export Act, Congressional hearings will soon be reviewing                    
  the terms and details, which include Alaska's situation.                     
  Therefore any expeditious assistance provided to Senator                     
  Pearce in attending the Energy Council meeting next month                    
  will assist our Congressional Delegation in making Alaska's                  
  case in Congress.                                                            
                                                                               
  Number 083                                                                   
                                                                               
  REPRESENTATIVE JOE SITTON stated that he supports the                        
  resolution, but questioned TAPS's historical position on the                 
  export ban.                                                                  
                                                                               
  SENATOR ELLIS responded to the question with some historical                 
  information and indicated there probably was a deal made                     
  between the Trans Atlantic Pipeline Service and the                          
  legislation of the 1970s.  Energy Department projections                     
  have claimed that imported oil will be up to 60 percent in                   
  the relatively near future, which is why the California                      
  independent oil producers are our biggest allies in this                     
  fight; domestic oil production is at the bottom of the                       
  barrel. Although the timing seems to be right, this will be                  
  an uphill battle.  Members of Congress will be debating this                 
  issue in the spring.                                                         
                                                                               
  SENATOR JALMAR KERTTULA indicated Alaska's need for                          
  inclusion and fair treatment in the nation's equity                          
  policies.                                                                    
                                                                               
  Number 141                                                                   
                                                                               
  SENATOR ELLIS emphasized the importance of providing                         
  Congress with current information such as the Prudhoe Bay                    
  production curve.  In order to make an informed decision,                    
  Congress needs to know of brand new discoveries in the oil                   
  field.  Economists previously projected a two to seven year                  
  glut of crude remaining on the West Coast; additional                        
  information might indicate a greater benefit than is                         
  currently being recognized.                                                  
                                                                               
  REPRESENTATIVE PETE KOTT moved and asked unanimous consent                   
  to adopt SJR 13.  Hearing no objection, the motion carried.                  
                                                                               
  Number 177                                                                   
                                                                               
  HB 401 - COASTAL ZONE MANAGEMENT PROCEDURES                                  
                                                                               
  DR. PAUL RUSANOWSKI, DIRECTOR, DIVISION OF GOVERNMENTAL                      
  COORDINATION, OFFICE OF THE GOVERNOR, also ADMINISTRATOR,                    
  ALASKA COASTAL MANAGEMENT PROGRAM, spoke for the need for                    
  passage of this legislation.  He said coastal zone                           
  management (CZM) has been in existence since 1977 and it has                 
  a fail-flaw that needs to be addressed.  He stated the                       
  Coastal Policy Council (CPC) has a due process conflict with                 
  the legislation which supports the elevation process within                  
  the CZM program. He further stated that roughly 70 percent                   
  of Alaska's population resides within the coastal zone.                      
  Alaska's CZM program encompasses most of the coastline and,                  
  in some cases, extends hundreds of miles inland.  The zone                   
  inward varies because each district within the coastal zone                  
  can set its boundaries based on various influences and                       
  conditions.  Within each district, any project that is                       
  subject to permitting by more than one agency or is                          
  federally permitted, is then coordinated in its review by                    
  the Division of Governmental Coordination.  The reviews are                  
  then subject to elevation if a dissenting party objects, and                 
  these can elevate to the director level within the resource                  
  agencies and ultimately to the commissioner level.  In the                   
  present situation, an aggrieved party can also petition the                  
  CPC to address the same issues that were subject to                          
  elevation.  A due process conflict is potentially created if                 
  the commissioners of the resource agencies also sit on the                   
  Coastal Policy Council.  This happened recently with the                     
  Timber Creek Cabin elevation.  He stated that we need a                      
  statutory and/or regulatory fix to resolve this issue.  The                  
  present bill separates individual projects from a petition                   
  of process/policy concerns.  A project would elevate through                 
  the review process but would not be petitioned to the CPC.                   
  In lieu of severing this petition process, another review                    
  step has been created within the consistency determination                   
  at the regional consistency level or the director level                      
  elevation.  The CPC would review their petition and make a                   
  determination.  If the comments were not fairly considered                   
  they would remand the determination for review.  This                        
  resolves the existing due process problem.  He pointed out                   
  this as an equitable solution and it enhances the                            
  consistency process.  By moving from the APA process to an                   
  informal hearing process, there is an estimated $8,000 net                   
  savings to the program.  This also provides an opportunity                   
  to ensure that public comment is considered in the process.                  
  At the present time, the public must rely on districts to                    
  champion their comments.                                                     
                                                                               
                                                                               
  DR. RUSANOWSKI called attention to the proposed amendment #2                 
  which originated within governmental coordination, and                       
  recommended that on page five, line 10, the following                        
  language be added under item (B): " A party that is                          
  authorized under AS 46.40.096(e-1) or (g) of this section                    
  may file a petition showing..."   This references both                       
  conditions and preserves all petition rights.                                
                                                                               
  Number 330                                                                   
                                                                               
  STEVEN PORTER, ARCO, ALASKA and MEMBER, COASTAL POLICY                       
  COUNCIL, stated the  CPC process was not designed to                         
  accommodate the individual consistency determination                         
  although they understand the need and desire to set a                        
  balance between conservation and development issues.  He                     
  said they came up with a consensus document that provides                    
  for a petition to the CPC regarding a reasonable time frame.                 
  The recommendation is that the reasonable time frame be no                   
  more than thirty days.  The amendment as stated is on page                   
  four, line six of the document.                                              
                                                                               
  Number 345                                                                   
                                                                               
  REPRESENTATIVE SITTON questioned whether thirty days was an                  
  adequate time frame for the council to address a possibly                    
  complex subject.                                                             
                                                                               
  Number 350                                                                   
                                                                               
  MR. PORTER responded that because of the purpose of the                      
  hearing, basically a single meeting of the CPC for a review                  
  indicated that thirty days would be ample time.  He stated                   
  there has not been opposition to the thirty days.                            
                                                                               
  Number 356                                                                   
                                                                               
  DR. RUSANOWSKI expressed there was no opposition to the                      
  thirty-day period.  He said there is an issue of adequate                    
  notification which argues for a reasonable period of time.                   
  From experience in working with elevations, which have a                     
  fifteen day review, thirty days seems more than adequate.                    
                                                                               
  Number 366                                                                   
                                                                               
  REPRESENTATIVE DAVIS questioned the logistics of the                         
  council's management of this thirty day process of review.                   
                                                                               
  Number 382                                                                   
                                                                               
  DR. RUSANOWSKI stated that a small number of projects,                       
  approximately one dozen move forward with some dispute; they                 
  are handled within a fifteen day meeting time line. He                       
  explained that in this case, we are broadening out to                        
  include the public and there is concern as to whether the                    
  same fifteen days would be adequate in all cases.                            
  Therefore, a longer period of time might be necessary to                     
  accommodate the public. He concluded there seems to be no                    
  problem with thirty days.                                                    
                                                                               
  Number 405                                                                   
                                                                               
  REPRESENTATIVE KOTT asked if the period for receipt of                       
  public comment was fifteen days.                                             
                                                                               
  DR. RUSANOWSKI responded the public comment period is                        
  typically thirty days for a public notice project, however                   
  it can be as short as seventeen days for response.  He said                  
  most of the projects have a thirty day public comment period                 
  associated with them.                                                        
                                                                               
  Number 418                                                                   
                                                                               
  MIKE O'MEARA (via Homer) commented that from his experience                  
  it is difficult for the public to adequately cope with a                     
  thirty day comment period as opposed to a sixty day period.                  
  He asked that consideration be given to the comments                         
  provided by the ombudsmen and other legislators in order to                  
  provide adequate comment time for the average citizen.  He                   
  stated that he would like more information.                                  
                                                                               
  Number 459                                                                   
                                                                               
  DR. RUSANOWSKI addressed the concern by recounting that a                    
  year and a half ago, the attorney general specified there                    
  was a due process problem in addressing the elevations and                   
  petitions.  The CPC authorized governmental coordination to                  
  proceed in building consensus for a solution.  The process                   
  included five participants from the CPC, Bob Walsh of                        
  Community & Regional Affairs, five different coastal                         
  districts, eight people from various resource agencies                       
  within the state, and five private industry representatives.                 
  In approximately a year's time, this working group met in                    
  attempts to craft a concept.  The concept went back to the                   
  CPC in October of last year and was endorsed by the council                  
  to move forward with support for legislative action.  Since                  
  October, members of this working group have met informally                   
  with the Division of Governmental Coordination to work on                    
  various drafts of the present legislation.  In January, the                  
  efforts were completed.                                                      
                                                                               
  Number 501                                                                   
                                                                               
  MR. O'MEARA asked for an elaboration of the five coastal                     
  districts involved in this process.                                          
                                                                               
  Number 506                                                                   
                                                                               
  DR. RUSANOWSKI stated that district participation was                        
  solicited throughout the process, but the five districts                     
  that chose to be consistent in their participation were                      
  Bristol Bay Coastal Resource Service Area, Kodiak Island                     
  Borough, Northwest Arctic Borough, North Slope Borough and                   
  the Aleutians West Coastal Resource Service Area.                            
                                                                               
  Number 529                                                                   
                                                                               
  BETH KERTTULA, ASSISTANT ATTORNEY GENERAL, DEPARTMENT OF                     
  LAW, stated this legislation is the result of a very long                    
  public process with a great deal of involvement from various                 
  sectors; this resolution is able to involve both the CPC                     
  while still allowing for an elevation process, thereby                       
  working quite well in coordinating permits in Alaska.  She                   
  said that a copy of the opinion is available if anyone is                    
  interested.                                                                  
                                                                               
  Number 568                                                                   
                                                                               
  CHAIRMAN GREEN questioned if the proposed changes would                      
  satisfy potentially future litigation.                                       
                                                                               
  Number 588                                                                   
                                                                               
  MS. KERTTULA indicated that perhaps there may be future                      
  regulations that require more input from the coastal                         
  districts, but more to the point, she expressed her                          
  confidence in this as an open and broad-based process.  She                  
  said this is a good step forward in allowing third parties                   
  to petition the CPC, and because there is a time limit                       
  involved, a notice will be required to go out.  She further                  
  stated this is one more step for public notice and notice                    
  requirements that agencies will have to meet.  Coastal                       
  Management has been moving in this direction all along and                   
  this takes it a step further.                                                
                                                                               
  Number 649                                                                   
                                                                               
  CHAIRMAN GREEN questioned if DR. RUSANOWSKI's testimony in                   
  favor of the bill indicated the Administration's support of                  
  the bill.                                                                    
                                                                               
  Number 656                                                                   
                                                                               
  DR. RUSANOWSKI said the Office of the Governor concurs with                  
  this legislation.                                                            
                                                                               
  TAPE 94-5, SIDE B                                                            
  Number 660                                                                   
                                                                               
  A motion was made to adopt amendment #1.  Hearing no                         
  objection, the motion carried.                                               
                                                                               
  Number 668                                                                   
                                                                               
  REPRESENTATIVE KOTT moved to adopt amendment #2, either (e)                  
  or (g).  This amendment was submitted by Governmental                        
  Coordination on February 2, 1994.  Hearing no objection, the                 
  motion carried.                                                              
                                                                               
  Number 678                                                                   
                                                                               
  CHAIRMAN GREEN entertained a motion to move HB 401 out of                    
  committee with individual recommendations as amended.                        
  Hearing no objections, it was so ordered.                                    
                                                                               
  ADJOURNMENT                                                                  
                                                                               
  CHAIRMAN GREEN adjourned the meeting at 5:52 p.m.                            
                                                                               

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