Legislature(1995 - 1996)
02/27/1996 10:11 AM O&G
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
HOUSE SPECIAL COMMITTEE ON OIL AND GAS February 27, 1996 10:11 a.m. MEMBERS PRESENT Representative Norman Rokeberg, Chair Representative Scott Ogan, Vice Chair Representative Gary Davis Representative Bill Williams Representative Tom Brice Representative Bettye Davis Representative David Finkelstein MEMBERS ABSENT All members were present COMMITTEE CALENDAR HOUSE BILL NO. 394 "An Act authorizing a program of natural gas and coal bed methane development licensing and leasing; relating to regulation of certain natural gas exploration facilities and coal bed methane exploration facilities for purposes of preparation of discharge prevention and contingency plans and compliance with financial responsibility requirements; amending the duties of the Alaska Oil and Gas Conservation Commission as they relate to natural gas exploration activities and coal bed methane exploration activities; and amending the exemption from obtaining a waste disposal permit for disposal of waste produced from coal bed methane drilling." - MOVED OUT OF COMMITTEE PREVIOUS ACTION BILL: HB 394 SHORT TITLE: GAS & COAL METHANE LICENSES & LEASES SPONSOR(S): REPRESENTATIVE(S) OGAN,ROKEBERG,James JRN-DATE JRN-PG ACTION 01/05/96 2369 (H) PREFILE RELEASED 01/08/96 2370 (H) READ THE FIRST TIME - REFERRAL(S) 01/08/96 2370 (H) O&G, RESOURCES, FINANCE 02/08/96 (H) O&G AT 10:00 AM CAPITOL 124 02/08/96 (H) MINUTE(O&G) 02/13/96 (H) O&G AT 10:00 AM CAPITOL 124 02/21/96 2846 (H) COSPONSOR(S): JAMES 02/27/96 (H) O&G AT 10:00 AM CAPITOL 124 WITNESS REGISTER JAMES HANSEN, Leasing/Evaluation Division of Oil and Gas Department of Natural Resources 3601 C Street, Suite 1380 Anchorage, Alaska 99503-5948 Telephone: (907) 269-8804 POSITION STATEMENT: Testified on HB 394 JOHN CONNOR Alaska Agricultural Research Group Chairman, Natural Resources Committee Kenai Peninsula Resources Conservation and Development District P.O. Box 15038 Fritz Creek, Alaska 99603 Telephone: (907) 235-5550 POSITION STATEMENT: Supported HB 394 DAVID LAPPI, Owner LAPPI Resource, Incorporated 4900 Sportsman Drive Anchorage, Alaska 99502 Telephone: (907) 248-7188 POSITION STATEMENT: Testified in support of HB 394 BILL WEBB Trading Bay Energy Trading Company 825 West 8th, Suite 204 Anchorage, Alaska 99501 Telephone: (907) 279-5655 POSITION STATEMENT: Testified in support of HB 394 PAUL CRAIG, Chairman of the Board Trading Bay Energy Trading Company 825 West 8th, Suite 204 Anchorage, Alaska 99501 Telephone: (907) 279-5655 POSITION STATEMENT: Testified in support of HB 394 JACK CHENOWETH, Legislative Counsel Legal Services Division of Legal and Research Services Legislative Affairs Agency 130 Seward Street, Suite 409 Juneau, Alaska 99801-2105 Telephone: (907) 465-3867 POSITION STATEMENT: Testified on HB 394 ACTION NARRATIVE TAPE 96-12, SIDE A Number 000 The House Oil & Gas Special Committee was called to order by Chairman Norman Rokeberg at 10:11 a.m. Members present at the call to order were Representatives Rokeberg, Ogan, G. Davis, Williams, Brice, B. Davis, and Finkelstein. A quorum was present. This meeting was teleconferenced to Anchorage and Homer. CHAIRMAN ROKEBERG announced the agenda was a continuation of the hearing on HB 394. HB 394 - GAS & COAL METHANE LICENSES & LEASES Number 165 REPRESENTATIVE SCOTT OGAN, sponsor of HB 394, said it is an act authorizing shallow bed natural gas leasing. He said, currently there is problem with diesel fuel storage facilities that are failing, causing economic and environmental problems in the rural communities. He said the clean up and renovation of these diesel fuel storage tanks is estimated to be around $500 million. He added that every year, $20 million is spent on power cost equalization. He said transporting diesel fuel is hazardous and mentioned the potential environmental problems associated with hauling diesel fuel up river by barge. Number 237 REPRESENTATIVE OGAN said natural gas, by contrast, is clean and could be utilized in many parts of rural Alaska. Most of these rural areas which have natural gas potential will be pioneer areas of natural gas exploration and are outside of any lease schedule or large scale development. Number 259 REPRESENTATIVE OGAN said rural homes could be heated by natural gas and that electricity could be generated by natural gas because diesel generators can be converted to burn natural gas. Number 276 REPRESENTATIVE OGAN said the purpose of HB 394 is to encourage shallow gas development production within the state of Alaska. He said this natural gas would not be part of a pipeline system or a resource that would be exported. The HB 394 relieves the bonding and regulatory requirements placed upon those who would develop this resource for rural communities, and added that those requirements are currently geared towards large, commercial oil fields that are exporting resources. He said the committee substitute for HB 394 represents a concerted effort between the sponsor, private entities and the Administration. He said converting the rural communities to natural gas should have occurred much sooner. Number 397 REPRESENTATIVE OGAN referred to a map of the state of Alaska, produced by Polar Consult of Alaska which showed the potential coal and coal methane fields throughout the state. He said the primary intent of HB 394 will be to go after coal bed methane. He said the reserves follow the Yukon River and river beds. He said methane gas is trapped in fissures and within the coal reserves. He said tapping this resource is very much like drilling a water well, small rigs are used and would be transported into the region by cargo plane. He added that the drilling depth is 3,000 feet or less. He said the possibility of finding oil is remote in these shallow regions. He said when they get into areas with a high gas content, the casing will be perforated and it will be piped out into a system set up within the village to either heat homes or generate electricity. Number 501 REPRESENTATIVE OGAN said there is a tremendous potential for coal and coal bed methane reserves in the state of Alaska. He mentioned that changes have been made to HB 394. Number 550 REPRESENTATIVE GARY DAVIS made a motion to adopt the committee substitute for HB 394, version 9-LS1463\G. Hearing no objection it was so ordered. Number 583 REPRESENTATIVE OGAN said there were five major changes made in this new version of CSHB 394. He said the use of the 470 Fund is exempt in CSHB 394. He briefly described the 470 Fund, saying that it was a fund set up by the Department of Environmental Conservation (DEC) to cover spills. He said there is the possibility of having to use the 470 Fund to clean up areas contaminated by diesel fuel. He referred to a handout, available in the committee packet titled, "Alaska Rural Energy Initiative," which showed photos of leaking diesel storage tanks and tanks that are not on properly constructed bases. He said this diesel fuel is continuing to leak and again referred to the cost of clean up and creating new storage tanks. He then compared that situation to a graph demonstrating the worldwide number of oil spills which have occurred in onshore exploration since 1978. He said there was one in 1985 and since then there haven't been any. He said the chances are very remote, especially if you are not drilling below 3,000 feet. He said if oil is discovered in this shallow depth it will most likely be heavy oil and not something that is going to be flowing to the surface. Number 755 REPRESENTATIVE OGAN said CSHB 394 kept the $25,000 bond. He said a $1 million dollar bond is limited to large scale developments. The rent on the lease is changed from an annual cost of $3.00 and acre to 50 cents an acre, with a cost of 25 cents an acre prior to production annually. He said CSHB 394 involves small operations in rural areas and wanted (indiscernible) responsibility and up front costs which will keep leasers from coming and doing speculative drilling. He said these are two year leases and if the leaser does not develop or actively work the lease it is lost. Number 825 REPRESENTATIVE OGAN said royalties were reduced to 6.25 percent for these operations, cutting the current royalty in half, to offer development incentive. He reiterated the potential amount lost in revenue as compared to the $500 diesel storage tank cost. He said the higher the royalty, the fewer villages will have natural gas developments for their fuel use. Number 882 REPRESENTATIVE GARY DAVIS asked about a fiscal note. Number 892 REPRESENTATIVE OGAN said there was a fiscal note attached from the previous version of HB 394 and a new fiscal note hadn't been prepared for CSHB 394. He said the old fiscal note said the costs associated with the bill would be $386,000 for the first year in order to set up a licensing program. He believed the current licensing provisions under CSHB 394 would create a fiscal note which would be smaller. Number 977 REPRESENTATIVE BILL WILLIAMS asked for clarification regarding the 470 Fund. Number 1007 REPRESENTATIVE OGAN said the 470 Fund was set up to clean up oil spills. He said a request for information, regarding how this fund has been used in the past, was sent to DEC. He said the likelihood of an oil spill is very small due to the 3,000 foot limit. He said there is no oil above the 3,000 foot limit in the Cook Inlet basin, and added that on the North Slope, heavy oil is located above this 3,000 foot limit. He said the development will be in pioneer areas of tertiary sediments, layered sediments of coal. He said in the unlikely problem derived from a drilling operation, even then the costs of cleaning up this spill would be less than the current costs associated with diesel fuel storage tanks and from hauling this fuel up river. Number 1169 REPRESENTATIVE DAVID FINKELSTEIN said the 470 Fund is just the system set up in the state to provide funds for emergency clean-up in the event of an oil spill. He reiterated Representative Ogan's point that an oil spill is unlikely and said that it is unlikely that the 470 Fund would be used. Number 1201 REPRESENTATIVE OGAN said the most likely exposure, if it were to occur, would happen when the diesel gas tank was being filled on the drilling rig. He mentioned the $25,000 bond which would cover incidental costs. Number 1223 REPRESENTATIVE FINKELSTEIN said, that however remote the possibility of an oil spill is, you still want access to the 470 Fund as added precaution. Number 1290 JAMES HANSEN, Leasing/Evaluation, Division of Oil and Gas, Department of Natural Resources (DNR), testified via teleconference from Anchorage. He said CSHB 394 was brought up briefly and some technical staff also looked at it. He said there are some basic concerns that need to be addressed, the first being whether the state is rushing into a new program without fully examining the possible, negative impacts CSHB 394 might have. He said the best interest finding (BIF) is a long, arduous process which takes up to two years, but the purpose of a BIF is to for DNR to determine the positive and negative impacts for any type of oil and gas exploration and more importantly to provide a public review process. He said it is important to give the rural areas a chance to say whether or not they want the shallow drilling rigs in certain areas. Number 1404 MR. HANSEN said the rural areas have a different topography than the Cook Inlet basin. He said Alaska is a tectonically active area and are composed of crunched up sediments. He said there is no way of knowing, outside of drilling, whether there is oil less than 3,000 feet. He said oil has been found less than 3,000 feet in many of the lower 48 states and cited examples of this occurring in West Virginia, Pennsylvania, Texas and Kansas. He said, because oil hasn't been found less than 3,000 feet in the Cook Inlet, doesn't mean it won't happen in the interior. Number 1445 MR. HANSEN said that when you get gas from coal you are going to have to de-water the coal first. He said the formation waters around coal contain salts and are also acidic. Coal produces nauseous methane, carbon dioxide, carbon monoxide and nitrogen gases. He said there are impacts from coal bed methane production and he asked whether those impacts are worth it compared to the known impact of diesel fuel storage tanks. He restated the concern over the public review process and the factors involved with drilling for natural gas. Number 1515 REPRESENTATIVE OGAN said an operator who is interested in coal bed methane told him that their objective is to drill in tertiary sediments, coal bed sediments. He asked if most of the coal bed sediments are tertiary. Number 1545 MR. HANSEN said tertiary refers to an age. He said it is unknown what the structure of the sediments are, under the surface. Number 1554 REPRESENTATIVE OGAN asked if, in the interior basin, without seismic work to discover where broken up pockets are, whether it is easier to identify coal beds. Number 1575 MR. HANSEN said an area the interior basin is full of thrusts and faults, poor reflection data is obtained from those areas. He said it all depends on how the formation is laid out. He said there are areas that are going to be flat and areas that are not, but you are not going to be able to determine this from the surface. This information will only be obtained through shallow or deep surveys or through drilling. He said DNR knows little about these areas. Number 1637 REPRESENTATIVE OGAN referred to the map and asked how they were able to determine where the coal bed reserves were. MR. HANSEN said coal will show up with seismic reflections. REPRESENTATIVE OGAN asked if seismic reflections have been done in the areas of the map showing known or highly suspected coal reserves. Number 1670 MR. HANSEN said a map done by the National Geologic Survey showing coal bed deposits, he said it was done through a surficial geology investigations. He said, with coal, you look at the surface, find the coal and then map where it dips into the subsurface and this is how these maps are developed. He said only four seismic lines have been shot in interior Alaska. Number 1701 CHAIRMAN ROKEBERG asked if coal areas could be exposed with that type of seismic work. Number 1708 MR. HANSEN said coal would not necessarily be exposed, he said the seismic work that had been done was mainly identification of hard rock minerals. Number 1714 REPRESENTATIVE FINKELSTEIN referred to a provision of HB 394, and said it does not allow the Administration to adopt regulations relating to anything, including the setting of procedures to govern application of this section. He asked Mr. Hansen to comment on this section. Number 1731 MR. HANSEN said, the way HB 394 is written, the DNR cannot write regulations and if anything needs to be changed, it needs to go back to the legislature to make those changes. He said this process would be more cumbersome than writing new regulations. He recommended leaving the possible regulatory changes to the discretion of the commissioner. He said, if DNR finds that certain things are not covered by HB 394, then DNR should be able to write regulations to address the situation, rather then waiting until session began to do anything. Number 1770 REPRESENTATIVE FINKELSTEIN received clarification, from Mr. Hansen, that there were no other areas that the Administration was forbidden to write regulations. Number 1783 CHAIRMAN ROKEBERG asked if DNR disagreed with the provision in HB 394 which exempted a BIF. Number 1800 MR. HANSEN said, he felt, there would be public resentment, especially in the local community, if they were not given an opportunity to express their feelings towards natural gas development. Number 1822 REPRESENTATIVE FINKELSTEIN expressed that the commissioner of DNR cannot make any findings, determinations, and added that HB 394 is written in such a way that excludes any public input. He referred to page three, line 24, which says the director shall enter into these leases upon application. Number 1846 MR. HANSEN agreed with what Representative Finkelstein said, and added that in permiting there is a review process within the agencies and he believed that the public did have an opportunity to review those permits. He said HB 394 reverts back to a precedent the state used to follow, he said this precedent was changed. He added that there would be problems in the community if something is carried through in which they did not have any input. Number 1886 REPRESENTATIVE FINKELSTEIN said he is not sure that HB 394 allows the permit process as described by Mr. Hansen. He said in HB 394 it states, "promptly after receipt of a lease application, the director shall enter into these lease." He said it was unclear whether the DNR would have time to enter into discussions or considerations, and added that if this process is done it doesn't matter because the lease needed to be given. Number 1900 JOHN CONNOR, Alaska Agricultural Research Group, and Chairman, Natural Resources Committee, Kenai Peninsula Resources Conservation and Development District, testified via teleconference from Homer. He gave a brief overview of the Kenai Peninsula Resources Conservation and Development District saying it represented various constituencies and worked with a federal employee of the Natural Resource Conservation Service (NRCS) that assists the group with activities regarding resource development and conservation matters. He said HB 394 would allow local communities to benefit from the natural resources which are currently not utilized. He said, "we are taking the commodity products that we are sending out, exporting, the wood, the wood chips and the various other things and produce an industry based on a much cheaper and more reliable source of fuel that is not as likely to spoil our area as an increase in diesel fuel and diesel holders, that kind of thing." He stated that he didn't think that the people in Homer would have a problem with water well type of drilling. MR. CONNOR said HB 394 requires a 640 acre size on the lease and requested some changes to the bill in order to reduce this to a size suitable to a small industry size, as is done in other states including Ohio. Number 2062 MR. CONNOR mentioned the "value added concerns" that might come up in the Finance Committee. He said commodities, which are currently not utilized, can be transformed, producing activity for the local economy. He said local control over these industries needs to be maintained. He cited the benefits and mentioned the problems the region around Homer faces. He said it is costly to develop the natural gas resource and suggested language exempting royalties or something similar to that, "as long as you are talking about increased value added processes." He thought, "your BIF will be actually aired well in advance of these things through the process of creating an area plan for the Kenai Peninsula through our organization which is associated with the NRCS and looks to serve the best interest of all the people of the Kenai Peninsula." He concluded that he is very supportive of HB 394. Number 2168 CHAIRMAN ROKEBERG said under HB 394, the original lease could be 640 acres, but the commissioner has the ability to redraft the amount of lease area, after a discovery is made, contracting the size of the lease area. Number 2198 MR. CONNOR believed that the language of HB 394 read that the "lease area could be reorganized so those 640 acres is cared for in a different way." He said he would study the language of HB 394 further. Number 2211 REPRESENTATIVE GARY DAVIS read from CSHB 394, page three, line 17, which states, "the area to be leased may not exceed 23,040 acres and may not be less than 640 acres." He requested information from the sponsor regarding this figure. Number 2240 REPRESENTATIVE OGAN said the figure was derived from discussions with industry about what they felt an appropriate minimum lease size should be. He said he would address this issue and another concern later in the meeting, at the suggestion of Chairman Rokeberg. Number 2266 DAVID LAPPI, Owner, LAPPI Resource, Incorporated, testified via teleconference from Anchorage. He said his business is a small, independent oil and gas exploration company based in Anchorage. He said his company supports CSHB 394 and views it as an environmental bill rather than something which would add additional risk to the environment. He said the more rural areas that can switch their fuel use, from diesel to natural gas, the safer our environment is going to be. He said Alaskans know the risks of producing, refining, transporting, storing and distributing diesel fuel and having them switch over to natural gas is a correct one from an environmental point of view. Number 2322 MR. LAPPI said CSHB 394 will protect the 470 Fund because the more people using diesel fuel, the higher the risk is that the 470 Fund would have to be used. He addressed the issue of public process and said the testimony, being conducted on CSHB 394 today, is a public process. He said public input will be entertained during the permitting process through the Coastal Zone Management Consistency Review and other permit requirements. He cited the fact that a temporary tent camp of more than ten people can not occur without a permit which has a public comment process. He said CSHB 394 is designed to reduce the amount of work that the state government does. He hoped CSHB 394 would have little negative impact on the state budget and that a small fiscal note would accompany it. He said drilling will not occur in rural areas where it is not wanted or desired. He said markets are needed before drilling can begin and public process will occur through this manner. He urged the committee to adopt CSHB 394 as it is an environmental as well as a pragmatic approach to solving some of the energy problems in rural Alaska. Number 2477 BILL WEBB, Trading Bay Energy Trading Company, testified via teleconference from Anchorage. He said he is in support of CSHB 394 so that all the coal bed methane reserves can be developed in the state of Alaska. TAPE 96-12, SIDE B Number 000 MR. WEBB mentioned the BIF and said that everyone he has met agrees that natural gas is the best fuel used in the world community. He mentioned the diesel storage tank issue, the power cost equalization program, the rural electrification program and stated that he hoped coal bed methane exploration could help resolve those problems. He remarked that CSHB 394 has received wide spread public support and added that Commissioner Shively remarked, last summer, that the public process is often used as a delaying tactic. He said the new fiscal times demand that we encourage innovation and efforts by the entrepreneurs rather than delay them and get in their way. He concluded that he supported CSHB 394 and that it should be passed this session so that aggressive coal bed methane development can occur. Number 076 PAUL CRAIG, Chairman of the Board, Trading Bay Energy Trading Company, testified via teleconference from Anchorage. He said both he and his company support CSHB 394. Number 121 REPRESENTATIVE TOM BRICE asked the cost and the time required for a BIF. Number 143 MR. HANSEN said the DNR has to plan for a two year period to complete a BIF and said the original fiscal note was done under the assumption that a BIF would need to be done and represented the cost. Number 173 REPRESENTATIVE BRICE asked if the expected cost of a BIF is considered prohibitive to DNR, considering the low expectation of return from the natural gas royalties and lease payments. Number 196 MR. HANSEN remarked that the DNR did two BIF for sales that no one attended. REPRESENTATIVE BRICE asked if the costs associated with the two BIFs would be distributed across other sales where people did show up. Number 217 MR. HANSEN said the cost of a BIF is in terms of people and time and if we develop a new program, we will have to do additional findings requiring more staff. Number 246 REPRESENTATIVE OGAN asked the maximum time of a BIF. Number 255 MR. HANSEN said normally the BIF process takes two years which includes requests for extended public comment period. He said the extensions of public comment is something that DNR just does, it is not something that they must do. He said if a BIF were required under CSHB 394 they could limit it to one public comment period. CHAIRMAN ROKEBERG asked Mr. Chenoweth to come forward to testify. He also directed the committee's attention to a letter by the Calista Corporation, dated February 26, 1996. He said this letter requests an amendment which would clarify the language relating to private ownership and state leases in CSHB 154. The Calista Corporation has requested that any provisions included in CSHB 394 be applicable to private, state and federal lands. Number 350 REPRESENTATIVE OGAN said this issue didn't appear to be a problem in CSHB 394, private land owners can okay drilling on their land. Number 365 JACK CHENOWETH, Legislative Counsel, Legal Services, Division of Legal and Research Services, Legislative Affairs Agency, was next to testify. He said the section being referred to was Section 6, found on the bottom of page eight and the top of page nine. He said Section 6 offers an exemption for current waste disposal permitting. He said page eight, line 23, Section 6 states that a permit is not required. He said, under current law, a permit is not required for coal bed methane. In the discussion around CSHB 394, it was agreed that no distinction should be made between coal bed methane drilling and any other shallow bed gas drilling. He said to do this he eliminated the reference in CSHB 394 to coal bed methane drilling, at the bottom of page eight, and carried the whole thing forward in the context of shallow bed gas development leasing under Alaska Statute 38.05.177, so that in effect the change would provide for an exemption from a waste disposal permit for any activity under the exploration activity authorized under 38.05.177. MR. CHENOWETH said the Calista Corporation is asking that some sort of protection be built back in CSHB 394 for private land owners. He said if a private land owner required a permit disposal be obtained, CSHB 394 could incorporate that into the language. He said he wasn't sure if the language suggested by the Calista Corporation would do that, as it merely extends the exemption. Number 449 CHAIRMAN ROKEBERG said an additional committee substitute would be formed before CSHB 154 went to the Resources Committee. He said he would like the committee to adopt the concept of CSHB 394, but the language did not need to be done right away. He referred to the amendments submitted by Representative Finkelstein. Number 517 REPRESENTATIVE OGAN said he opposed the amendments submitted by Representative Finkelstein. Number 550 REPRESENTATIVE FINKELSTEIN said there are three amendments. He said the first, and the most important, Amendment 1, regards the compromise in the issue of BIF, on page three, line 24 to take the word, "shall" and replace it with "may" leaving in the provisions of CSHB 394 that eliminate the BIF. He said CSHB 394 would not require a BIF process, but would leave some discretion regarding public comment to the director. He said CSHB 154 automatically gives someone the right to obtain this lease regardless of any other use that might be occurring on these lands such as subsistence hunting or recreational use. He said the way CSHB 394 is written, once the application is put in for those areas, the director shall give out the lease, regardless of those local concerns and the director has no chance to mitigate those concerns. He said the change of the wording allows a modicum of discretion by the director. Number 621 REPRESENTATIVE OGAN referred to Mr. Lappi's testimony and said these are wells that are going to be done with the support, cooperation, and marketing of the local community before they are developed. Number 662 REPRESENTATIVE FINKELSTEIN said there are going to be circumstances, "we know from experience," where someone is going to object to certain parts of a land area that they are not going to want leased and CSHB 394 does not allow the director the ability to solve problems. Number 704 CHAIRMAN ROKEBERG said "it was grossly objectionable not to exempt this from a BIF." He said it is not the intention of this committee to entirely reject the public process and CSHB 394 should incorporate public comment. Number 737 REPRESENTATIVE FINKELSTEIN said Amendment 1 has nothing to do with eliminating a BIF. He said the director "may" enter into these leases and referred to the lines where this amendment was focused. Number 830 REPRESENTATIVE GARY DAVIS clarified that Amendment 1 left Section 3 intact, but gives discretion to the director. Number 840 CHAIRMAN ROKEBERG said if there were any leases that were a problem, it would be looked at under Amendment 1. Number 871 REPRESENTATIVE OGAN said the amendments that haven't been moved would have a bearing on the public input process. He said he was hesitant to give the director this discretionary authority on the lease. A vote was taken on Amendment 1, Representatives Rokeberg, Ogan, Gary Davis and Brice voted nay. Representatives Bettye Davis and Finkelstein voted yea. Representative Williams was absent for the vote. Amendment 1 failed to be incorporated into CSHB 394 by the House Special Committee on Oil and Gas. Number 1000 REPRESENTATIVE GARY DAVIS said he would like the discussion of Representative Finkelstein's amendments to take place and would like to see it addressed and possibly incorporated into CSHB 394. Number 1021 CHAIRMAN ROKEBERG said the areas of public input, fees and regulation will be reviewed before a committee substitute is introduced in the House Resources Committee. Number 1038 REPRESENTATIVE OGAN concurred with Chairman Rokeberg and said he would be happy to work with Representative Finkelstein to develop the language of CSHB 394. Number 1045 CHAIRMAN ROKEBERG thought there should be an inclusion of a fee application and public process during the permit process, rather than have a protracted BIF. He said there might need to be regulations regarding the development of this resource. Number 1079 REPRESENTATIVE FINKELSTEIN said he would work with the sponsors. REPRESENTATIVE BETTYE DAVIS made a motion that the committee move CSHB 394 with accompanying fiscal note and individual recommendations. Hearing none CSHB 394 was moved from the House Special Committee on Oil and Gas. ADJOURNMENT There being no further business to come before the House Oil & Gas Special Committee, Chairman Rokeberg adjourned the meeting at 11:19 a.m.