03/02/2004 03:23 PM House O&G
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ALASKA STATE LEGISLATURE
HOUSE SPECIAL COMMITTEE ON OIL AND GAS
March 2, 2004
3:23 p.m.
MEMBERS PRESENT
Representative Vic Kohring, Chair
Representative Cheryll Heinze
Representative Jim Holm
Representative Norman Rokeberg
Representative Harry Crawford
Representative Beth Kerttula
MEMBERS ABSENT
Representative Lesil McGuire
COMMITTEE CALENDAR
CS FOR SENATE BILL NO. 265(RES)
"An Act relating to the schedule of proposed oil and gas lease
sales and to a related report to the legislature; and providing
for an effective date."
- HEARD AND HELD
SENATE BILL NO. 266
"An Act approving an interim classification by the commissioner
of natural resources closing certain land within the area of the
proposed Bristol Bay (Alaska Peninsula) competitive oil and gas
areawide lease sale to oil and gas exploration licensing and
shallow natural gas leasing; and providing for an effective
date."
- HEARD AND HELD
PREVIOUS COMMITTEE ACTION
BILL: SB 265
SHORT TITLE: OIL&GAS LEASE SALE SCHEDULE/NOTIFICATION
SPONSOR(S): RULES BY REQUEST OF THE GOVERNOR
01/14/04 (S) READ THE FIRST TIME - REFERRALS
01/14/04 (S) RES
02/04/04 (S) RES AT 3:30 PM BUTROVICH 205
02/04/04 (S) Moved CSSB 265(RES) Out of Committee
02/04/04 (S) MINUTE(RES)
02/06/04 (S) RES RPT CS 5DP 1AM SAME TITLE
02/06/04 (S) DP: OGAN, SEEKINS, WAGONER, DYSON,
02/06/04 (S) ELTON; AM: STEVENS B
02/25/04 (S) TRANSMITTED TO (H)
02/25/04 (S) VERSION: CSSB 265(RES)
02/26/04 (H) READ THE FIRST TIME - REFERRALS
02/26/04 (H) O&G, RES
02/26/04 (H) O&G AT 3:15 PM CAPITOL 124
02/26/04 (H) Scheduled But Not Heard
02/27/04 (H) RES AT 1:00 PM CAPITOL 124
02/27/04 (H) -- Meeting Canceled --
03/02/04 (H) O&G AT 3:15 PM CAPITOL 124
BILL: SB 266
SHORT TITLE: BRISTOL BAY OIL & GAS LEASE SALE CLOSURE
SPONSOR(S): RULES BY REQUEST OF THE GOVERNOR
01/14/04 (S) READ THE FIRST TIME - REFERRALS
01/14/04 (S) CRA, RES
02/02/04 (S) CRA AT 1:30 PM FAHRENKAMP 203
02/02/04 (S) Moved SB 266 Out of Committee
02/02/04 (S) MINUTE(CRA)
02/04/04 (S) CRA RPT 3DP 2NR
02/04/04 (S) DP: STEDMAN, WAGONER, STEVENS G
02/04/04 (S) NR: LINCOLN, ELTON
02/04/04 (S) RES AT 3:30 PM BUTROVICH 205
02/04/04 (S) Moved Out of Committee
02/04/04 (S) MINUTE(RES)
02/06/04 (S) RES RPT 6DP
02/06/04 (S) DP: OGAN, SEEKINS, STEVENS B, WAGONER,
02/06/04 (S) DYSON, ELTON
02/25/04 (S) TRANSMITTED TO (H)
02/25/04 (S) VERSION: SB 266
02/26/04 (H) READ THE FIRST TIME - REFERRALS
02/26/04 (H) O&G, RES
02/26/04 (H) O&G AT 3:15 PM CAPITOL 124
02/26/04 (H) Scheduled But Not Heard
02/27/04 (H) RES AT 1:00 PM CAPITOL 124
02/27/04 (H) -- Meeting Canceled --
03/02/04 (H) O&G AT 3:15 PM CAPITOL 124
WITNESS REGISTER
MARK MYERS, Director
Division of Oil & Gas
Department of Natural Resources
Anchorage, Alaska
POSITION STATEMENT: Testified on SB 265 and SB 266 and answered
questions from the committee.
ROBERTA HIGHLAND
Homer, Alaska
POSITION STATEMENT: Asked a question related to SB 265.
ACTION NARRATIVE
TAPE 04-07, SIDE A
Number 0001
CHAIR VIC KOHRING called the House Special Committee on Oil and
Gas meeting to order at 3:23 p.m. Representatives Kohring,
Holm, Rokeberg, and Crawford were present at the call to order;
Representative Kerttula arrived shortly thereafter.
Representative Heinze arrived as the meeting was in progress.
SB 265 - OIL&GAS LEASE SALE SCHEDULE/NOTIFICATION
[Contains discussion of SB 266]
Number 0040
CHAIR KOHRING announced that the first order of business would
be CS FOR SENATE BILL NO. 265(RES), "An Act relating to the
schedule of proposed oil and gas lease sales and to a related
report to the legislature; and providing for an effective date."
Number 0105
MARK MYERS, Director, Division of Oil & Gas, Department of
Natural Resources (DNR), referred to two maps on the wall [also
found in the packet, labeled "Areawide Lease Sales" and
"Exploration Licensing"]. He described the Alaska Peninsula -
Bristol Bay region and noted similarities to the Cook Inlet
region with regard to the potential for commercial oil and gas.
Mr. Myers explained that there were 26 wells drilled in those
areas before 1985; many have oil or gas "shows," meaning there
is oil and gas in the basin. He mentioned oil seep and
indicated that the division has found good potential reservoir
rocks, key components in [determining] oil potential, and that
there are large geologic structures, poorly mapped or
understood.
MR. MYERS explained that the concept of the sale of this land
came from within the region. Because of the depressed economy,
people want to stimulate economic activity; they feel they could
obtain a local source of energy, natural gas, and also promote
commercial oil and gas development, leading to jobs and further
economic development. Citing letters of recommendation in the
packet, Mr. Myers said the division is working in conjunction
with Bristol Bay Native Corporation and the Aleut Corporation,
which have come to an agreement with the region's three borough
governments. He noted that the Alaska Peninsula - Bristol Bay
region encompasses a large fishery and other resources, and
emphasized that the area has potential for oil and gas.
MR. MYERS explained the basis of SB 265, pointing out the
significant change for reports given to the legislature for the
five-year program of proposed oil and gas lease sales and the
location of potential tracts proposed for oil and gas
exploration; they are changed from biennial to annual, to allow
the region to increase oil production and exploration. Since
the Division of Oil & Gas wouldn't have to wait until the start
of a new legislative session, it could lease this land sooner.
Number 0432
REPRESENTATIVE HOLM asked who would pick up the extra cost of
preparing an annual report versus a biennial one, since there is
a zero fiscal note accompanying the bill.
MR. MYERS replied that there shouldn't be much additional cost,
since the division already produces an annual report; if there
were additional costs, the division believes they'd be so small
as to have little fiscal impact.
Number 0515
REPRESENTATIVE ROKEBERG asked about the areawide leasing
provisions relating to the lands offered for leasing and the
requirement that they had to have been previously offered for
lease.
MR. MYERS answered that once a best interest finding (BIF) is
done, the land would be available for a 10-year period, but
without a BIF the land wouldn't be available. The best interest
finding process has to occur first. He cited the graphs on the
bottom of the maps, stating that the timelines illustrated there
presume the area will be ready by 2005; that includes the time
needed to do the BIFs. He added, according to SB 265, that the
Division of Oil & Gas would have to annually notify the
legislature of any findings.
Number 0602
REPRESENTATIVE ROKEBERG asked for further clarification on the
BIFs and how they relate to lands not previously offered for
sale or lease.
MR. MYERS answered that the key to further exploration for oil
and gas lies with the BIFs, and determining that the leasing of
specific areas is within the state's best interests and
expediting the litigation that would be required to open land up
for exploration if were determined to be within the state's best
interests.
REPRESENTATIVE ROKEBERG asked whether SB 265 would convert the
area from the five-year leasing program to the areawide leasing
program.
MR. MYERS explained that before the areawide leasing program,
every site had to have a BIF performed separately. With the
development of the areawide leasing program, the "artifact" of a
BIF still exists; after the area is deemed within the state's
best interest, a finder's schedule is still produced, even
though most of the sites are "reofferings" of the same areas.
Number 0695
REPRESENTATIVE ROKEBERG asked if the policy or statute set up by
SB 265 would allow the Division of Oil & Gas to reoffer the land
annually, since it would be under the areawide leasing program.
MR. MYERS affirmed that is how the land would be offered, but
said it's dependent on the determination that exploring that
land would be within the state's best interests.
Number 0733
REPRESENTATIVE ROKEBERG asked how the land would be managed
without passage of SB 265.
MR. MYERS replied that with the current system, the Division of
Oil & Gas can still do the BIFs, but the notification procedures
under the current law require the division to notify the
legislature two years in advance. He said without passage of
SB 265, the sale of the land will be delayed until 2007.
Number 0799
REPRESENTATIVE ROKEBERG asked how the BIFs would be financed,
since the costs don't appear in the fiscal note.
MR. MYERS explained that the fiscal note applies to the change
in notification procedures that SB 265 sets up. He acknowledged
that the sale or leasing of land will have some costs, but those
costs fall under the Division of Oil & Gas's operating budget
that is before the Senate at this time.
REPRESENTATIVE ROKEBERG requested an estimate for the costs that
the division would accrue by conducting the BIFs.
MR. MYERS said he didn't have a good estimate, but feels it
would be in the several-hundred-thousand-dollar range. He added
that most of the costs would come from staff time. He explained
how the Division of Oil & Gas has integrated with the people who
live in the area and has committed to make multiple
presentations to the people at the various stages of progress.
He said most of the division's costs will come from this
integration.
Number 0943
MR. MYERS explained that $325,000 has been requested by the
Division of Oil & Gas; the money will be used for many things
besides conducting the BIFs. [The division] will have to
determine the three-mile limit in the region; compile a lot of
technical data, including seismic data; and put the information
onto compact disks. The Division of Oil & Gas is trying to
generate competition for the upcoming sale or lease of the land.
With regard to staff hours, the division has created a new
position to further help with the BIFs. He commented that the
Alaska Peninsula - Bristol Bay region was only one region out of
many in Alaska that are conducting best interest findings. Thus
the division has created a schedule and has enough work to keep
its staff of three people busy going from one area to another.
REPRESENTATIVE ROKEBERG asked if there was any way to use the
older seismic data to make a three dimensional (3-D) image,
rather than having to re-record it all.
MR. MYERS explained that because of the way the data was
collected and the poor quality of the old data, it wasn't able
to be used in the 3-D imaging.
Number 1126
REPRESENTATIVE ROKEBERG asked if the Division of Oil & Gas was
allowing firms to do seismic studies before the lease or sale of
the property.
MR. MYERS responded that seismic data is permitted on state land
as long as the firm obtains the proper permits and adheres to
environmental requirements. He informed the committee that
allowing that to happen is commonplace and that the Division of
Oil & Gas allows this in order to increase the likelihood of a
sale. He added that there is an extra incentive for businesses
with regard to the seismic modeling because of the 40 percent
tax credit passed in 2003.
Number 1172
REPRESENTATIVE HOLM asked if the seismic data collected would be
available to the state.
MR. MYERS answered that if the firm that collects the seismic
data used the tax credit, it would be available to the state and
would be released in 10 years. If the firm doesn't use the tax
credit, the state would obtain the information during the
permitting process. He said the only time the state wouldn't
get this information is if the seismic data wasn't gathered on
state lands.
Number 1220
REPRESENTATIVE KERTTULA asked for clarification about the
duration of the best interest findings.
MR. MYERS answered that the findings would be good for 10 years
unless there was substantial new evidence or information, and
then the findings would have to be revised.
REPRESENTATIVE KERTTULA asked if that was a change that SB 265
initiated, or is how it's presently set up.
MR. MYERS answered that the duration of the BIFs wouldn't be
affected by SB 265; just the notification of the legislature and
the timing of the potential sale are affected.
Number 1260
REPRESENTATIVE KERTTULA referred to Mr. Myers' comment about
establishing a three-mile boundary and asked if that boundary
would extend offshore.
MR. MYERS said that because of the federal offshore continental
shelf area and the state's submerged lands, the Division of Oil
& Gas doesn't have a definite line; the division needs to work
that out with the federal government, and it will take at least
a year to get the surveyor and work through the process. He
said some of the land for sale does go offshore because of the
state's submerged lands, but one promise made by the Division of
Oil & Gas to the area's residents was to require onshore
facilities and only allow directional drilling offshore. He
said there wouldn't be any offshore pads or any other type of
infrastructure, other than perhaps docks that would allow access
to the coast.
Number 1348
REPRESENTATIVE KERTTULA asked if the federal moratorium covered
the state waters and, if not, whether the Division of Oil & Gas
was looking to lease in those areas.
MR. MYERS answered that the state waters aren't covered by the
federal moratorium, and that the Division of Oil & Gas was
looking to lease the land. He added that the decision was made
after a full consultation with the local regions. He stated
that the Division of Oil & Gas is just starting to do the
preliminary best interest findings, so no decisions have been
made. He remarked that the proposal seems to have wide
acceptance within the region.
Number 1381
MR. MYERS, in reply to a question from Representative Rokeberg,
explained that the federal moratorium was initially set in the
federal budget until 2012, but, to his understanding, [U.S.
Senator Ted] Stevens had removed it. He said he doesn't know of
any intent for the federal government to pursue any leasing or
selling offshore. Citing a conversation he'd had with Minerals
Management Service (MMS), he said the federal government
wouldn't pursue that unless there was local input. He said in
order for the federal government to reestablish the moratorium,
it would have to have a conversation with the local residents
and the state wouldn't be involved. Referring to a map of the
geological features, he said the thickest part of the basin
extends offshore, but there is significant geological potential
onshore, so the land can be sold without involving the outer
continental shelf (OCS).
Number 1478
REPRESENTATIVE KERTTULA said there is a lot of local support in
the area based on the letters in the packet, but wondered how
local fishing groups felt about the division's proposition.
MR. MYERS said he thought the support for [exploring] the OCS
was split about 50-50 in the region, and the fishing community
was probably more on the side that was opposed. He said he
hasn't heard substantial concerns from the fishing community
about directional drilling offshore from an onshore site. He
added that the Division of Oil & Gas expects to have major
dialog with the fishing community to protect the natural streams
in an effort to keep the spawning grounds safe.
Number 1546
REPRESENTATIVE KERTTULA asked if anything in the statute or
legislation requires the offshore drilling to be directional
drilling.
MR. MYERS said that requirement is usually worked out during the
best-interest-findings process. He said he believed there was a
clear understanding that the intent of the people in the region
was to only allow directional drilling and that the BIFs would
reflect that.
Number 1644
ROBERTA HIGHLAND referred to page 14, line 1, and asked if
revisions and additions could be done at the last minute without
going through the process and the BIFs.
MR. MYERS responded that the lease sale, or substantial
amendments to the sale, cannot go forward without a best-
interest-findings report. He explained that the notification
that SB 265 refers to is to the [legislature]. He added that
SB 265 doesn't substantively change the existing processes.
Number 1757
CHAIR KOHRING closed public testimony. [SB 265 was held over.]
SB 266-BRISTOL BAY OIL & GAS LEASE SALE CLOSURE
[Contains discussion of SB 265]
CHAIR KOHRING announced that the final order of business would
be SENATE BILL NO. 266, "An Act approving an interim
classification by the commissioner of natural resources closing
certain land within the area of the proposed Bristol Bay (Alaska
Peninsula) competitive oil and gas areawide lease sale to oil
and gas exploration licensing and shallow natural gas leasing;
and providing for an effective date."
Number 1795
MARK MYERS, Director, Division of Oil & Gas, Department of
Natural Resources, explained that SB 265 and SB 266 are
companion bills that strive to hold a competitive lease sale in
the Bristol Bay - Alaska Peninsula region in 2005, if that lease
sale proves to be in the best interests of the state. He said
SB 266 was kind of a strange bill because it is an artifact of
having more than one type of leasing. Under current law,
because it's not currently classified as an areawide sale, a
company or individual can propose either a exploration license
or a shallow gas lease in the area; if that were to occur, the
area would be cut down or, in the case of a shallow gas lease,
only the deep-gas rights would be available.
MR. MYERS said in order to provide a better competitive market,
the area needs to be kept whole, with all depths available. He
also pointed out that there may be future conflict if there are
shallow-gas lessees and deep-gas lessees on the same land. He
explained that the commissioner of [DNR] has entered into a
mineral closing order to help facilitate this process, but the
order is only valid for 90 days and will be lifted April 12,
2004, if the legislature doesn't affirm the order. He explained
further that the area is being closed now, with the intention of
opening it later in an effort to make a better sale.
Number 1925
CHAIR KOHRING, referring to the list of regions on pages 2 and 3
of SB 266, asked for assurance that care and prudence were given
to selecting the right areas and that it will not jeopardize
high-potential areas for future drilling of oil and gas.
MR. MYERS replied that the areas were determined based on the
geology, and the decision was made to close those areas that had
at least a kilometer of potential reservoir rock. He said the
areas to the north were set aside because the Division of Oil &
Gas felt there was a potential source of natural gas there for
the local communities, but didn't think it would be economically
viable for commercial oil and gas extraction. He said the
economic border that was chosen was a rational one, although it
may not be perfect. He also said the areas were chosen because
the division thought it would be easier to license them.
MR. MYERS shared that the areas set aside haven't been analyzed
since the late 1970s to early 1980s, and that the firms
interested in the sites need time to gather data before they
purchase the land; the sooner those areas became available, the
better. He said the division's decision was partly based on the
geological interpretation, as well as consultation with Bristol
Bay Incorporated.
Number 2102
CHAIR KOHRING remarked that it was commendable to be sensitive
to areas with good fishing grounds and areas where the viability
of the oil and gas is questionable. He voiced concern, however,
over closing up areas when the goal is to encourage more
development. He asked if there is any way to cease oil and gas
exploration during those times of year when fishing is prevalent
in that area, as opposed to shutting down those areas year-
round.
MR. MYERS said part of the process that the Division of Oil &
Gas goes through when determining potential sites is full
integration of all resource values. He shared that in
determining how to best utilize all resources available, the
division works with the Alaska Department of Fish & Game (ADF&G)
as well as human-resource agencies and locals' knowledge of the
area. He stated that the goal of the Division of Oil & Gas is
to come up with a win-win situation.
Number 2260
MR. MYERS explained that many decisions such as where to place
facilities, where to directionally drill, and seasonal
restrictions are determined from the best interest findings
(BIFs). For example, in the Cook Inlet region there are
seasonal restrictions during the migration of salmon and smolt.
A mix of tools would be used to determine the best course of
action, and those tools are used during the BIF process. He
emphasized that each region is different, so the solution in the
Bristol Bay - Alaska Peninsula region will differ from those in
the North Slope or Cook Inlet regions. He said the advantage of
using the BIFs is that it finds a balance between oil and gas
extraction and what is best for the community. He added that
after all of the data collection, the Division of Oil & Gas
cannot presume that there will definitely be a sale.
Number 2312
MR. MYERS commented on the prospective areas, saying that
because of the earlier data that was collected, the Division of
Oil & Gas has a pretty good idea where to draw lines and
separate the different sections, but it isn't a perfect science.
In the future, there may be a supplemental finding or an
amendment that would change the regions. He noted that after
the BIFs are finalized, they may preclude areas in the region to
leasing, but they can extend beyond the "finding" area. He said
the Division of Oil & Gas appreciates the input from the region,
as well as input it receives from state and national agencies.
Number 2349
REPRESENTATIVE HOLM asked what percentage of the areas that are
illustrated on the map [on the wall] is being removed from being
available to lease for oil and gas.
MR. MYERS replied that all the state land within the outline is
basically being removed at this point so it can be kept intact
and offered up for competitive sale at a later date. The
Division of Oil & Gas doesn't want the state to issue any
licenses, shallow gas or otherwise, that would interfere with
the competitive sale. He emphasized that the closure of the
licensing is only prior to the completion of the BIFs and
processing the areawide sale. He added that they only want the
land closed in order to open it up at a later date.
Number 2425
REPRESENTATIVE HEINZE asked for an estimate of how much money
would be available to the state under the competitive leasing of
the land versus shallow gas leasing.
MR. MYERS said he wasn't sure; the price would depend on the
market, what is found, and the competition, but he expects
anywhere from a couple of million dollars to upwards of $100
million. He said there were over five million acres available.
Because the land is contiguous, is in a highly prospective area,
and has many other positive values, the Division of Oil & Gas
has a lot of optimism about the prospective sale of the land.
He stressed that he wasn't certain, however.
Number 2484
REPRESENTATIVE ROKEBERG observed that the closure of this land
seems to be indefinite, and asked for clarification on that
issue, since the goal is to increase revenue for the state.
MR. MYERS said he wasn't sure about the process that would lift
the closure, but believes it would be up to the commissioner [of
DNR]. He said he'd be able to find that information out for the
committee.
REPRESENTATIVE ROKEBERG asked for further clarification on the
comment about lifting the moratorium.
MR. MYERS clarified that he should have used the term "mineral
closing order," since there is no moratorium on state leasing.
REPRESENTATIVE ROKEBERG surmised that because the order in
question is uncodified law, [the legislature] is statutorily
effectuating the mineral closing order, rather than putting this
order into statute and reclassifying the land. He asked if this
was a good analysis of what was happening.
MR. MYERS said his understanding is that mineral closing orders
have to be confirmed by the legislature or else they become
invalid after a 90-day period.
Number 2599
REPRESENTATIVE ROKEBERG remarked that it seemed they were
closing this land indefinitely and that it could only be opened
back up by executive action, which isn't clear at this point, or
by a repeal by the legislature.
MR. MYERS said he was sorry that he didn't have that information
offhand, but believed that Representative Rokeberg was correct
in saying that the closure could be lifted by the commissioner.
Number 2624
REPRESENTATIVE KERTTULA asked if the Division of Oil & Gas would
be averse to a letter of intent stating that it wasn't going to
allow offshore drilling, but only would allow directional
drilling from an onshore site, and referencing the recent
concerns expressed about the fishing areas.
MR. MYERS said he personally had no problem with that, except if
it would circumvent the BIF process. He added that he'd have no
problem with such a letter because he believes that is the
intention of the Division of Oil & Gas.
Number 2694
REPRESENTATIVE ROKEBERG asked if Representative Kerttula was
suggesting that the legislature come up with the letter of
intent.
REPRESENTATIVE KERTTULA said that was her intention.
REPRESENTATIVE ROKEBERG related his concern that this might
upset the public process, as well as the BIF process. He didn't
think the legislature should be meddling around when there is no
information coming in from the people in the region, he added.
Number 2722
REPRESENTATIVE KERTTULA, noting that SB 266 had a further
referral to the House Resources Standing Committee, suggested
that public feedback could be obtained before it came out of
that committee.
CHAIR KOHRING announced that the House Special Committee on Oil
and Gas could hold the bill until that information was received.
He added that he didn't have a lot of testimony about this
specific bill and would like to get opinions from the fishing
community and the local residents. He agreed that feedback from
the affected communities would be very helpful.
Number 2778
REPRESENTATIVE ROKEBERG stated that SB 266 tightens
classification and brings a more rigorous regulatory scheme into
play. He reminded members that there is a deadline of April 10
to get SB 266 passed.
CHAIR KOHRING said he understood those points, but felt it was
necessary to get some input from the affected regions. He asked
Mr. Myers why this is needed in statute and why the Division of
Oil & Gas can't enter into a memorandum of agreement with the
communities.
Number 2849
MR. MYERS replied that SB 265 and SB 266 don't do that; they are
merely procedural bills that allow the Division of Oil & Gas to
hold the lease sale in 2005. He added that the BIF document is
developed from public input. He reiterated that it is the
intent to only allow directional drilling, and said that was
determined after talking with the community and the fishermen.
He said he'd have no problem with a letter of intent, but was
concerned about circumventing the best interest findings
process; however, he'd discuss it with the administration to see
if they are agreeable to it. He also pointed out that he has
letters of support from many different groups and organizations
that are in the affected communities, which should be in the
bill packet.
Number 2949
REPRESENTATIVE ROKEBERG asked how time-sensitive the passage of
these bills is.
MR. MYERS responded that the passage of SB 265 and SB 266 is
very time-sensitive. He reiterated that the mineral closing
order expires on either April 10 or April 12, and if SB 265 and
SB 266 aren't in effect by then, the land that has been set
aside will come up for sale and they may lose some of the money
from the future sale.
TAPE 04-07, SIDE B
Number 2974
MR. MYERS further explained that passage of SB 265 and SB 266
would help to assure future buyers that the land would be
available no later than 2005.
REPRESENTATIVE KERTTULA asked how long the federal moratorium
had been in effect. She predicted that the recent lifting of
that moratorium and the introduction of these bills will cause
added scrutiny, which she feels could be lowered with a letter
intent saying there will be no offshore drilling.
Number 2923
MR. MYERS responded that the Division of Oil & Gas does not
control the Minerals Management Service or the federal schedule.
He added that the moratorium has been in place since 1992, and
that there is still an executive order closing the area; so if
there was to be any offshore drilling, it wouldn't be for many
years down the road, if at all.
Number 2890
CHAIR KOHRING asked whether anyone else wished to testify. He
then closed public testimony.
Number 2865
REPRESENTATIVE HEINZE asked if the letters of support in the
committee packet were in support of both SB 265 and SB 266.
MR. MYERS replied that they were in general support of the sale;
both SB 265 and SB 266 are necessary for that to happen. He
reiterated what each bill covered and stated that the letters in
the packet illustrated the strong local support.
Number 2777
CHAIR KOHRING asked why the process hadn't been expedited
sooner, considering the impending deadline. He also asked how
the deadline could be extended, if necessary.
MR. MYERS answered that the administration determines when to
introduce the bills, so he doesn't know why it was introduced
when it was. He added that the bills took a little longer than
anticipated in the Senate, which increased the sense of urgency.
He reiterated that the Division of Oil & Gas is limited by
statute as to the length of the mineral closing order, and needs
the confirmation of the legislature or else will be in violation
of the statute; thus there is no way to extend the deadline. He
remarked that if the bills don't pass this year, the Division
Oil & Gas will notify the legislature next January and start the
two-year clock at that time. Mr. Myers noted that passage of
these bills will speed up that clock, and will allow the
Division of Oil & Gas to keep the land whole so that there will
be a better market value when the land is sold.
Number 2648
CHAIR KOHRING told members he'd like to see the letter of intent
that Representative Kerttula proposed, as well as hear more
feedback on both sides of the issue, and so would hold both
bills until the next meeting. [SB 266 was held over.]
ADJOURNMENT
There being no further business before the committee, the House
Special Committee on Oil and Gas meeting was adjourned at
4:20 p.m.
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