01/11/2000 10:10 AM House O&G

       HOUSE SPECIAL COMMITTEE ON OIL AND GAS                                                                                   
                  January 11, 2000                                                                                              
                     10:10 a.m.                                                                                                 
                                                                                                                                
COMMITTEE CALENDAR                                                                                                              
                                                                                                                                
ORGANIZATIONAL MEETING                                                                                                          
                                                                                                                                
TAPE                                                                                                                            
                                                                                                                                
00-1, SIDE A                                                                                                                    
                                                                                                                                
CALL TO ORDER                                                                                                                   
                                                                                                                                
Representative Whitaker, Chairman, convened the House Special                                                                   
Committee on Oil and Gas meeting at 10:10 a.m.                                                                                  
                                                                                                                                
PRESENT                                                                                                                         
                                                                                                                                
Members present at the call to order were Representatives Whitaker,                                                             
Dyson, Phillips, Green, Harris, Kemplen, Brice and Smalley.                                                                     
Representatives  arrived as the meeting was in progress.                                                                        
                                                                                                                                
SUMMARY OF INFORMATION                                                                                                          
                                                                                                                                
CHAIRMAN WHITAKER announced that the purpose of the meeting was to                                                              
articulate the committee's agenda and goals for the session.                                                                    
                                                                                                                                
REPRESENTATIVE PHILLIPS introduced Scott Petsel, her new aide, who                                                              
also is a geologist.                                                                                                            
                                                                                                                                
CHAIRMAN WHITAKER introduced committee staff.                                                                                   
                                                                                                                                
CHAIRMAN WHITAKER summarized the committee's general business as                                                                
being to hear bills and resolutions assigned to it.  Further, he                                                                
said, it is the committee's responsibility to discern and                                                                       
understand issues related to oil and gas in Alaska. He mentioned                                                                
two specific issues of concern to him:  commercialization of North                                                              
Slope gas and North Slope market dynamics.  Chairman Whitaker then                                                              
invited committee members to add to the list.                                                                                   
                                                                                                                                
REPRESENTATIVE DYSON added the issue of how Alaska crude oil                                                                    
competes in the world market.  He later mentioned that the Pacific                                                              
Northwest Economic Region (PNWER) provides a good forum for                                                                     
discussion of regional concerns. He recommended that BP Exploration                                                             
(Alaska) Inc. provide a summary of heavy oil production.                                                                        
Representative Dyson said world security now is strange and                                                                     
dangerous.  He suggested that it would be in the national interest                                                              
to identify unknown oil reserves in Alaska, perhaps doing test                                                                  
drilling from the national defense perspective.  He also asked if                                                               
it was in this committee's purview to look into problems the Alaska                                                             
Railroad Corporation has had in transporting oil, and suggested a                                                               
joint meeting with the House Transportation Standing Committee                                                                  
concerning those problems.                                                                                                      
                                                                                                                                
REPRESENTATIVE KEMPLEN recommended sending a letter to the House                                                                
Transportation Standing Committee inviting them to a joint meeting.                                                             
                                                                                                                                
CHAIRMAN WHITAKER continued, adding to the list of committee                                                                    
concerns an understanding of Alaska's so-called Shallow Gas Act.                                                                
He requested a status report on lease sales on the North Slope, and                                                             
suggested that agency staff might come in and report.  He also                                                                  
suggested reviewing the state's regulatory regime regarding oil and                                                             
gas.                                                                                                                            
                                                                                                                                
CHAIRMAN WHITAKER emphasized that the committee needs to understand                                                             
the implications of the proposed merger of British Petroleum with                                                               
ARCO Alaska, Inc., but would not be debating the merger issue per                                                               
se.  He noted that his position is that the merger would erode the                                                              
free enterprise system, but that the Administration has made a                                                                  
decision, and now it is up to the committee to consider positive                                                                
and nonpolitical steps the legislature can take.                                                                                
                                                                                                                                
REPRESENTATIVE PHILLIPS suggested a joint meeting with Canadian                                                                 
interests regarding the Canadian connection to North Slope gas.                                                                 
                                                                                                                                
REPRESENTATIVE GREEN said Canada's Renaissance Oil Company, based                                                               
in Alberta, is interested in Alaska, and he advocated participation                                                             
in this state by independent oil companies.                                                                                     
                                                                                                                                
REPRESENTATIVE KEMPLEN suggested inviting Anadarko Petroleum                                                                    
Corporation to make a presentation on how they see that company                                                                 
fitting into plans for the state.  He also recommended looking into                                                             
fuel cells and other alternative fuels that may, in the future,                                                                 
affect demand for Alaskan oil and gas.  In addition, he requested                                                               
an update on the status of energy reserves in Southcentral Alaska.                                                              
                                                                                                                                
REPRESENTATIVE SMALLEY recommended looking into value-added                                                                     
processing.                                                                                                                     
                                                                                                                                
REPRESENTATIVE HARRIS suggested considering the implications of the                                                             
proposed BP/ARCO merger with reference to its impact on jobs in the                                                             
state.  He also expressed concern about the new Valdez vessel tax                                                               
on tankers, which he said could have a serious effect on the price                                                              
of Alaska oil on the world market.                                                                                              
                                                                                                                                
COMMITTEE ACTION                                                                                                                
                                                                                                                                
The committee took no action.                                                                                                   
                                                                                                                                
ADJOURNMENT                                                                                                                     
                                                                                                                                
CHAIRMAN WHITAKER announced the committee would not adjourn, but                                                                
was recessing until 10 a.m. on Thursday, January 13, 2000.                                                                      
                                                                                                                                
NOTE:                                                                                                                           
                                                                                                                                
The meeting was recorded and handwritten log notes were taken. A                                                                
copy of the tape and log notes may be obtained by contacting the                                                                
House Records Office at Room 229, Terry Miller Legislative Office                                                               
Building, 129 Sixth Street, Juneau, Alaska 99801-1182, (907)                                                                    
465-2214, and after adjournment of the second session of the                                                                    
Twenty-first Alaska State Legislature, in the Legislative Reference                                                             
Library.