Legislature(1995 - 1996)
02/14/1995 03:10 PM House RES
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE RESOURCES STANDING COMMITTEE
February 14, 1995
3:10 p.m.
MEMBERS PRESENT
Representative Joe Green, Co-Chairman
Representative Bill Williams, Co-Chairman
Representative Scott Ogan, Vice Chairman
Representative Alan Austerman
Representative Ramona Barnes
Representative Irene Nicholia
MEMBERS ABSENT
Representative John Davies
Representative Pete Kott
Representative Eileen Maclean
COMMITTEE CALENDAR
Confirmation of Robert Hinman to the Big Game Commercial Services
Board
Confirmation Advanced
Confirmation of Gene Burden, Commissioner, Department of
Environmental Conservation
Confirmation Advanced
Confirmation of John Shively, Commissioner, Department of Natural
Resources
Confirmation Advanced
WITNESS REGISTER
ROBERT HINMAN, Appointee
Big Game Commercial Services Board
P.O. Box 3419
Juneau, AK 99803
Phone: 790-2754
POSITION STATEMENT: Answered questions regarding his confirmation
GENE BURDEN, Commissioner-Designee
Department of Environmental Conservation
410 Willoughby Ave., Ste. 105
Juneau, AK 99801
Phone: 465-5050
POSITION STATEMENT: Answered questions regarding his confirmation
JOHN SHIVELY, Commissioner-Designee
Department of Natural Resources
400 Willoughby Ave.
Juneau, AK 99801
Phone: 465-2400
POSITION STATEMENT: Answered questions regarding his confirmation
TAPE 95-15, SIDE A
Number 000
The House Resources Committee was called to order by Co-Chairman
Green at 3:10 p.m. Members present at the call to order were
Representatives Green, Williams, Ogan, Austerman and Nicholia.
Members absent were Representatives Barnes, Davies, Kott and
MacLean.
CO-CHAIRMAN GREEN stated Mat-Su, Seward and Tok were on
teleconference for listen only.
ROBERT HINMAN CONFIRMATION
ROBERT HINMAN, APPOINTEE, BIG GAME COMMERCIAL SERVICES BOARD
(BGCSB), stated he has been a resident of the state for
approximately 30 years and spent most of his career working for the
Alaska Department of Fish and Game (ADF&G) as a wildlife biologist.
He said there are very few parts of the state he has not had the
opportunity to see. After his retirement, he was appointed to the
Legislative Task Force on Guiding and Game and following that, he
was appointed to the BGCSB, of which he is currently serving as
Vice Chairman.
MR. HINMAN stated he is not now, has never been, or anticipates
ever being a guide. However, he felt the industry is one which
must be nurtured, protected, and controlled. He stressed guiding
is a very important industry in the state and is important to the
state's visitors as well. He said the work of the BGCSB has been
very concentrated in the last several years due to the overthrow of
the old system by the Supreme Court in the Oswichek case. He noted
at that time, the legislature abolished the old board and
established the BGCSB. He explained the BGCSB has basically
reinvented the whole system. The legislature established new
legislation which the board is implementing.
MR. HINMAN said it has taken the board this long to implement most
of the system and added that it is not complete yet. He felt the
board has devised a workable system for the management of the
guiding industry in the state.
Number 096
CO-CHAIRMAN GREEN said statutes governing the board "prohibit
guide-outfitting, transporting, and other big game commercial
service activities that are unsportsmanlike, unethical, unsafe and
against principles of game conservation, degrading to a
professional subject to this chapter, or that adversely affects
natural resources." He stated there has been talk about a bill
introduced earlier, as well as street talk about the few bad guides
who have spoiled the reputation of guides as a group. He wondered
if Mr. Hinman has any plans to address these rogue guides.
MR. HINMAN responded most businesses have a few sour apples and he
agreed that has been the case in the guiding industry as well. He
said one important aspect of the BGCSB is that it not only is a
regulatory board, but also has quasi-judicial powers to take action
on individuals who have violated the laws and if necessary, assess
fines or remove licenses. He pointed out that the BGCSB has taken
actions on literally dozens and dozens of guides in the past
several years. The board has removed licenses, suspended licenses,
levied heavy fines, and has served notice to the industry that the
board is intending to be even more strict in the future.
MR. HINMAN said obviously the board has not been able to get all of
the bad apples yet. He stated the investigator the board has at
the Department of Commerce has made significant strides in the past
year in working more cooperatively with the Department of Public
Safety and has been able to be more effective and efficient in
bringing cases before the BGCSB. He noted the investigator
presently has 108 cases under consideration.
REPRESENTATIVE ALAN AUSTERMAN recalled there had been discussions
regarding the need for the BGCSB. He said many people say the
program can be run through ADF&G. He wondered how Mr. Hinman felt
about that suggestion.
MR. HINMAN replied the program could be run by the ADF&G or any
other organization. He said at one time the program was run under
the ADF&G. He noted that much has changed since that time and if
ADF&G or anyone else would take it over, they would need to have
the same amount of or more manpower and funds to do it as under the
present situation. He stated in regard to the need for the
program, he felt if the state did not have any type of control by
this board or any other group over the professional guides, there
would be a situation of chaos--people who are not qualified would
be running around purporting to be guides.
MR. HINMAN pointed out there currently are statutes which say
nonresidents hunting big game must have a guide, as well as all
aliens hunting anything must have a guide. He said as long as the
state has that type of requirement for visitors, it would seem
logical the state has a moral duty to maintain quality of that
system these people must abide by.
Number 191
REPRESENTATIVE AUSTERMAN noted that Mr. Hinman's resume indicated
he served as a charter boat captain. He said charter boat
operations has some of the same connotations as big game hunting
and he wondered if some day in the future the charter boat industry
will require the same type of services that the BGCSB provides the
guiding industry.
MR. HINMAN responded he can foresee it, but he was not sure the
charter boat business has the same degree of necessity that big
game hunting has. He stressed the state does not require
nonresident fishermen go out with a charter boat captain. He said
the way the charter boat industry has grown in the past few years,
there will be a need for increasing controls of some nature.
REPRESENTATIVE SCOTT OGAN noted for the record he has known Mr.
Hinman for almost two years while serving on the BGCSB. He stated
he has no reservations about Mr. Hinman being confirmed to the
BGCSB.
Number 240
GENE BURDEN CONFIRMATION
GENE BURDEN, COMMISSIONER-DESIGNEE, DEPARTMENT OF ENVIRONMENTAL
CONSERVATION (DEC), said he started in his role as commissioner-
designee for DEC on January 16. He stated he is a ten year
resident of Alaska and during his time in Alaska he first worked
for a small law firm and then accepted employment with Tesoro
Alaska where he worked for a little over eight years. He added
that he had worked for Tesoro for approximately three years in
their corporate office in Texas.
MR. BURDEN stated most of his earlier management experience was in
the area of labor relations and human resources. He said he has
limited experience in government but noted he did work for the city
of Dallas. He received his bachelors and masters degrees at the
University of Texas at Arlington and law degree from St. Mary's
University in San Antonio. He told committee members his
professional experience with General Telephone & Electronics ranged
from labor relations administrator to area personnel manager to
labor relations director. Upon joining Tesoro in 1989 he was the
corporate manager of labor relations at a time when they had a
variety of different unions, and activities ranging from mining on
the East Coast to refineries in the Lower 48.
MR. BURDEN said he served in a variety of capacities at Tesoro
Alaska starting as their personnel manager and on to Vice President
of Administration & Government Affairs. He then assumed
responsibility for the environmental function. He stated during
his time in the state he has had many opportunities to deal with
the regulatory agencies as well as the legislature relating to
Tesoro's business.
REPRESENTATIVE AUSTERMAN noted there are many problems facing
Alaska, particularly problems relating to the water and sewer
issues in the rural areas. He asked Mr. Burden to comment on what
he sees as the biggest obstacle confronting his department.
MR. BURDEN responded there is a twofold problem relating to the
water and sewer issues in the state--the magnitude of the problem
in terms of the total expenses needed to address rural sanitation
issues which really exist all over the state and then having
systems that the people being served by them can maintain and not
present a continuing financial obligation to the state.
Number 327
CO-CHAIRMAN GREEN said one of the issues which came up during the
18th Legislature regarding the 470 fund is that originally that
fund was to establish some response depots around the state in
strategic locations and that has never happened. He asked Mr.
Burden to comment on establishing those depots.
MR. BURDEN responded he does not have an established position on
that issue. He said he would like to work with the department and
the legislature to determine if spending money on establishing
those depots is the best use of dollars, in view of the existence
of private spill response operations around the state. He felt
there are locations where it probably will serve the state's best
interest to have certain equipment capabilities where it is not
going to occur otherwise. He stressed he would like to have the
opportunity to explore what is already in place, from a private
sector standpoint, and ensure that where the department spends
money is truly areas where it is truly needed.
Number 350
REPRESENTATIVE RAMONA BARNES stated the law is very specific in
regard to spill response depots. She asked Mr. Burden if it was
his intent to ignore the law or amend the law.
MR. BURDEN replied no. He stressed he wants to have a reason basis
for where and what the department puts in these locations and if
the department concludes that the law, as it is currently
structured, is not in the best interest of the state, then he would
want to consult with the legislature to determine a means to fix
the problem. He said designating locations and what is in those
locations is not specified in the law and is something the
department needs to evaluate and make recommendations on.
REPRESENTATIVE BARNES recalled when that law went into effect, Mr.
Burden worked for Tesoro and the push for the law was not so DEC
could have a slush fund but to establish spill response depots.
Then when $50 million was reached, the fund would shut off until a
disaster occurred. She felt the surcharge was a phony way to get
a nickel a barrel from the oil companies. She noted the
legislature has done some rectifying in the past. She said the oil
companies are still paying three cents per barrel and asked Mr.
Burden if he views that money as part of the department's budget or
money there for a specific purpose.
MR. BURDEN stated the two cents per barrel goes to establishing the
$50 million reserve which now has been reached. He said the three
cents goes to help fund ongoing prevention programs which is
considered a part of the department's budget under the current
structure. All of those spill prevention response activities which
the department has are funded from those funds.
Number 403
CO-CHAIRMAN GREEN said the Regional Citizens' Advisory Councils,
the producers, and DEC have indicated a desire to have a generic
contingency plan. He asked Mr. Burden to comment on that plan.
MR. BURDEN stated he wholeheartedly supports simplifying the
contingency plan process and the contents of the contingency plans.
He noted he has been on the other side of the table preparing
contingency plans. He expressed concerns that the contingency plan
has expanded to the point where in the event of another accident,
the plan may be getting so complicated with material not
specifically relevant to the response, that it needs to be
readdressed. He noted the approach Representative Green mentioned
is one that has been suggested. He added the department has had
communication with one of the major cooperatives on the issue. He
would like to steer a policy which will enable the department to
simplify the process to the extent possible under current state
law.
CO-CHAIRMAN GREEN stated Anchorage and Fairbanks have both
experienced problems with air quality. He wondered what Mr.
Burden's attitude is about the use of alternate fuels such as
compressed natural gas (CNG) and liquified natural gas (LNG).
MR. BURDEN responded he is excited about the prospects of gas as a
fuel. There is a supply of gas in the proximity of Anchorage and
there are initiatives in Anchorage presently involving the
municipality, the state, and private industry to try and make CNG
available on a broader basis. He stated CNG burns clean, has a
good reputation for safety, and offers a great opportunity to use
another means to try and reduce the air emission issues in
Anchorage and Fairbanks. He said unfortunately Fairbanks does not
have the proximity to natural gas.
Number 446
REPRESENTATIVE OGAN stated he is aware of some abuses of power by
DEC including taking creative routes of enforcement. He asked Mr.
Burden to comment on his position in regard to working with
businesses.
MR. BURDEN replied he is concerned about that perception and
situations which can drive that perception. The department just
completed a couple of days of strategic planning for setting
specific objectives for the department and one of the categories
was in the area of public contact. He said that category will
involve customer service training for those people who have a lot
of public contact. He stated if one looks at some of the many
routes for that perception of the department, there are complex
rules and regulations being dealt with. He noted a lot of the
regulated community does not have the background and familiarity
with the process. Therefore, part of the department's role is to
educate the regulated community and the public as to what the laws
and requirements are. He felt there are things which can be
modified while still enforcing the laws of the state without
jeopardizing the objectives of protecting human health and the
environment.
REPRESENTATIVE OGAN felt DEC and other agencies have quasi-judicial
powers that circumvent due process rights. He said when an agency
such as DEC has the authority, without a court action, to deprive
someone of the their rights to use their property, he has a
problem. He asked Mr. Burden to be sensitive to the matter.
Number 503
REPRESENTATIVE BILL WILLIAMS asked Mr. Burden to comment on the
water quality standard issue.
MR. BURDEN said the water quality standards were signed into law
approximately one hour before Governor Knowles was sworn into
office. Shortly thereafter, it became clear there was going to be
a lawsuit to try and stop the implementation of those regulations
on several grounds. One of the grounds was there had been
substantial modifications in the regulations from the time they
were last public noticed to the time they were signed. He stated
the regulations which went into effect January 5, 1995, are the
regulations which the Environmental Protection Agency (EPA) uses in
making decisions regarding permanent applicants in the national
pollutant discharge elimination system (NPDES) permit status.
MR. BURDEN said some of the consideration involved concern about
having further delays in a number of major NPDES permits that were
working their way through the EPA review process. As an
alternative, a suggestion was made that there is a vehicle for an
individual or a group to use to seek a redress of a piece of or all
of the regulations. He stated when he began his position on
January 16, on his desk was a request to repeal those regulations
and declare an emergency. He elected to deny that request.
MR. BURDEN added there was also a request to reopen all the
regulations for reconsideration. He studied that request and
talked to people in Region X, EPA and consulted with staff. He
said one area he determined the regulations were deficient was the
absence of the antidegradation provision which is going to be a
requirement in the regulations. He stated there were four topics
raised by the Sierra Club Legal Defense Fund and after review, he
recommended that regulations be reopened to hear comments on those
topics. He stated that process is underway and comments will be
received until April 19, 1995. Following the comment period, there
will be an opportunity to make a decision one way or the other on
whether the department wants to recommend new regulations or change
regulations.
MR. BURDEN said in the course of this review and assuming that the
antidegradation provision ends up in the final regulations, he has
been advised by the Attorney General's Office it will take at least
a year before those regulations or any change in regulations could
become law. He stated in the interim, the regulations signed
December 5 are in effect and will remain in effect if and until
there is a change in regulations generated by DEC. He noted permit
applications currently being reviewed by EPA are being reviewed
under existing water quality regulations.
Number 560
CO-CHAIRMAN WILLIAMS asked how the situation will affect the
Ketchikan Pulp Company (KPC) water quality permit.
MR. BURDEN said he cannot respond directly because he does not have
any predisposition as to whether there will be modifications to the
regulations having a further effect on KPC. He added that he had
met with representatives of that entity. He felt the
antidegradation provision, which he expects to be in the new
regulations, will not have an impact on KPC.
REPRESENTATIVE BARNES recalled that Mr. Burden had stated the
regulations went into effect a few hours before Governor Knowles
becoming the Governor. She wondered if he was implying that was
somehow improper.
MR. BURDEN replied no.
REPRESENTATIVE BARNES clarified there had been a year or more of
work on the current water quality standard regulations which were
signed by the previous Administration.
MR. BURDEN stated two and one-half or three years of work had been
done.
REPRESENTATIVE BARNES felt with the extensive hearings held, anyone
who wanted a chance to comment certainly had the opportunity.
MR. BURDEN agreed there was a great deal of comment submitted on
these regulations.
REPRESENTATIVE BARNES asked if the department is now fearful
because of a lawsuit by the Sierra Club Legal Defense Fund.
MR. BURDEN replied that is a good question. He said in regard to
the four or five areas in the regulations being reviewed, the
department plans to give the most straightforward review as
possible. He suspects there will be decisions made which do not
satisfy the requests made by the Sierra Club Legal Defense Fund and
they may want to take further action.
REPRESENTATIVE BARNES stated she does not care if the Sierra Club
Legal Defense Fund sues when the state has followed all of the due
process in establishing regulations.
Number 596
CO-CHAIRMAN GREEN observed there has been a significant amount of
money expended for permits by various corporate structures for re-
establishing mining. He noted their problems come from the EPA but
also noted that EPA and DEC dovetail a lot. He wondered if there
is anything which can be done to help these companies get through
this permit process.
MR. BURDEN stated he has met with Echo Bay representatives and a
number of community representatives. He pointed out that Echo Bay
has spent $80 million in development thus far and another $80
million has been spent on Kensington. He noted there are
environmental problems associated with both of those projects which
have not been sorted out yet. He said he is encouraged by an
indication from the Echo Bay representatives and the community of
a willingness to get together and try to sort out some of the
issues separating the group. He felt there should be a common
ground to address community concerns. He stated one of those
concerns is very significant and that is the effect on Juneau's
water supply. He believed there are some alternatives available
and Echo Bay is willing to look at some flexible approaches to deal
with that issue and others.
Number 625
REPRESENTATIVE OGAN expressed concern that the Alaska government
and the agencies who regulate businesses are sending out an ominous
message to the business community in this country and abroad that
it is not a good idea to do business in Alaska and gave several
examples. He noted the state has had a serious decline in oil
revenues and there is a need to send out a message to the business
community that Alaska is a better, friendlier, and easier place to
do business with.
MR. BURDEN stated the objective of the Administration is to help
improve Alaska's ability to conduct business and have people come
to the state and invest. He said many of the components of that
perspective, whether it is a state like Alaska or some foreign
country that happens to appear temporarily attractive to investment
dollars, involve the stability and consistency on the regulatory
side of the business. He stressed that is something the department
has to be very sensitive to. He noted that many of these issues
are controversial and subject to diametrically opposed views of the
parties.
MR. BURDEN said he will try to bring to the department a
consistency and an effort to take into account the concerns from
not only the development side but of the public side as well,
relative to environmental health issues associated with these
projects. The department can help promote development by looking
at some of the success stories which have occurred in the state in
recent years and gave an example. He stated it is important to
study the success stories and determine what they did right so the
department can impart that to not only the businesses but also to
the department to speed these processes up.
Number 664
CO-CHAIRMAN GREEN stated when the Chernobyl problem came up, there
was department personnel who went to that area and areas in Europe
and suggested a plethora of radiological monitoring devices. He
wondered if the department can perhaps maximize the use of some of
the federal monies available. He said at one time it seemed like
the department was more interested in finding additional turf
rather than taking care of the turf they had.
TAPE 95-15, SIDE B
Number 000
MR. BURDEN stated the department has identified specific objectives
and he believes, as Vince Lombardi once said, "we take care of the
basics better than anyone else and everything else falls into
place". He said radiological monitoring is a serious matter and
something worthy of consideration. He was not sure that DEC will
be involved in monitoring in foreign countries, however, because it
is a state department or federal issue. If in fact the need
arises, the department would be talking to people in Washington and
agencies at the federal level to try and have that activity take
place.
REPRESENTATIVE IRENE NICHOLIA noted for the record that she
supports Mr. Burden as commissioner of DEC. She hoped that Mr.
Burden, once he is confirmed, establishes better relationships with
the small businesses in rural Alaska because they have concerns
about their relationship with DEC.
REPRESENTATIVE NICHOLIA made a MOTION to FORWARD the name of Gene
Burden to the joint committee for confirmation.
CO-CHAIRMAN GREEN asked if there were any objections. Hearing
none, the MOTION PASSED.
REPRESENTATIVE OGAN made a MOTION to FORWARD the name of Bob Hinman
to the joint committee for confirmation.
REPRESENTATIVE NICHOLIA asked if there was a letter of transmittal
for Robert Hinman from former Governor Hickel because his name is
not included in a letter dated February 13, 1995, from Governor
Knowles indicating his appointments.
CO-CHAIRMAN GREEN stated he has not seen a letter of transmittal.
REPRESENTATIVE NICHOLIA felt the appointment is not legal if there
is not a letter of transmittal.
CO-CHAIRMAN GREEN stated it is not up to the committee to determine
whether or not it is legal, but appreciated Representative
Nicholia's comments. He said the committee's responsibility is to
determine, from the standpoint of resources, if he is the one the
committee agrees to pass on. He stressed the legality of it would
have to be addressed on the floor.
REPRESENTATIVE NICHOLIA OBJECTED to the motion.
CO-CHAIRMAN GREEN asked for a roll call vote. Voting in favor of
the motion were Representatives Ogan, Austerman, Williams and
Green. Voting against the motion was Representative Nicholia.
The MOTION PASSED 4-1.
Number 106
JOHN SHIVELY CONFIRMATION
JOHN SHIVELY, COMMISSIONER-DESIGNEE, DEPARTMENT OF NATURAL
RESOURCES (DNR), stated he came to Alaska in 1965 as a VISTA
volunteer and noted a large part of his work in the state has been
with the Native community. He said he also worked as Chief of
Staff for Governor Sheffield, was Chairman and Chief Executive
Officer for United Bank of Alaska for a short period of time, and
has been a consultant for some time. He commented in regard to the
background he brings to the DNR--because of his involvement with
the Native community, he has had long standing involvement in
legal, regulatory, and legislative issues relating to land. He
mentioned when he worked for NANA Development Corporation, he was
the lead negotiator in putting together the Red Dog deal with
COMINCO. He added that he did quite a lot of work for the oil
industry, including the fact that NANA has a share of the Endicott
oil field and he was involved in the early unitization discussions
about that oil field.
Number 143
REPRESENTATIVE BARNES stated she has known John Shively ever since
he came to Alaska and has known him in all the positions he has
occupied. She said they have been on opposite sides of the table
many times but has never enjoyed working with anyone more than she
has with him. She stressed Mr. Shively has her wholehearted
support. She added this is the first time she has ever expressed
support for any person running for commissioner in any
Administration.
REPRESENTATIVE NICHOLIA added that she also supports Mr. Shively's
appointment.
REPRESENTATIVE OGAN said the Chickaloon River in his district has
been blocked by some private land owners who own land on adjacent
sides with the idea they have rights extending into the navigable
waterway. He wondered what Mr. Shively is going to do to assure
that public access to all navigable waters remains open to
everyone.
MR. SHIVELY asked if the situation being referred to is a private
individual land grant from either the state or federal government.
REPRESENTATIVE OGAN replied it is an individual land grant from the
federal government.
MR. SHIVELY clarified the owners are claiming people cannot walk up
the sides.
REPRESENTATIVE OGAN said the owners have strung a cable across the
river and want to charge people money to float the river.
MR. SHIVELY stated he does not have a legal answer but from what he
does know, it seems to be an absolute violation of state law. The
water column is clearly not owned by those individuals. He said if
the situation has not been turned over to the Attorney General's
Office, he would be happy to do it.
Number 208
CO-CHAIRMAN GREEN clarified that Mr. Shively is aware of the dust
stirred up in the 18th legislature about SB 308 which was a fix to
the lease sale 78 in the Cook Inlet. He said Governor Knowles has
indicated one of his early agenda items is the repeal of SB 308.
He asked Mr. Shively to comment.
MR. SHIVELY responded it was his understanding that the Governor
did campaign on that issue but whether or not it is one of his
early priorities, he did not know. He also understood that the
President of the Senate made a strong statement about that
legislation. He said at this point, he has no plans and he has not
been asked to do anything in regard to that legislation.
REPRESENTATIVE BARNES clarified that Mr. Shively is familiar with
the law and the charges to him under the law.
MR. SHIVELY replied yes.
REPRESENTATIVE BARNES stated as long as SB 308 is on the books, Mr.
Shively is bound to uphold that law.
MR. SHIVELY said that is correct. He added that in his previous
life, he supported that bill.
Number 246
CO-CHAIRMAN WILLIAMS stated there were a number of regulations
introduced last year for changes in Title 38. He wondered if Mr.
Shively had looked at those regulations. He also asked if the
Administration will support those changes and have them introduced
again.
MR. SHIVELY replied those regulations had passed his review for re-
introduction. He said the committee will be seeing some Title 38
revisions.
CO-CHAIRMAN GREEN stated Mr. Shively has been an outspoken advocate
of Native rights and now he is the chief administrator of the
state's land. He wondered how Mr. Shively plans to resolve
possible differences.
MR. SHIVELY responded he has different responsibilities now. He
recalled back in 1983 when he was appointed Chief of Staff, a
senator commented that he would have to broaden his horizons. He
felt he did broaden his horizons and is comfortable he can do that
now. He stated he recognizes the things he advocated for, both as
a representative of a Native organization and as a representative
of a business, might not be the same from the inside. He added
that he knows he has different responsibilities and those
responsibilities are bound by the laws of the state. He felt he
can uphold those responsibilities and stressed it is his intent to
do so.
CO-CHAIRMAN GREEN said it has been mentioned in the paper that the
petroleum industry is indicating a strong desire to get into a
cooperative basis as part of an incentives package that the state
of Alaska, in competition with major dollars around the world,
could come up with. He asked Mr. Shively to comment on incentives
which might help spur the state's economy.
MR. SHIVELY stated incentives are a tricky issue because the
department has two responsibilities. The first responsibility is
to get the resources development but the second responsibility is
to get a fair return for the citizens of the state. He said
deciding that mix is a challenge everyone faces. He felt there are
times when incentives will be important, particularly for getting
certain developments off the ground. He indicated the department
has had meetings with the industry already.
MR. SHIVELY said he is not sure there will be an answer to the
incentives question during this session. He felt there may be a
partial answer. He thought the issue deserves a great deal of
study both by the legislature and the Administration. He stated
incentives need to be done because the state needs to be
competitive in the world market. He noted the state has lived off
of Prudhoe Bay for a long time and there are a variety of other
opportunities in the state. He mentioned that the Red Dog project
got an incentive in a way. The state made a major investment
building a road to port. He expressed support for incentives.
Mr. Shively stressed these developments need to pay for themselves
and need to show a return for the state.
REPRESENTATIVE BARNES noted in regard to the Red Dog project and
the road, that money was paid back to the state with interest.
MR. SHIVELY said that was correct. The incentive gave the Red Dog
project a head start and yet the state got its capital back and
more. He felt those are the kinds of incentives which should be
looked at.
CO-CHAIRMAN GREEN noted that not all selections for both the state
and Natives, through the Native corporation land selection, have
been resolved. He asked how Mr. Shively anticipates his role in
trying to negotiate between a selection and an overselection.
MR. SHIVELY said if there are areas the state is particularly
interested in, the state needs to go to the Native corporation and
determine if the overselections can be lifted. He noted the danger
for the state has always been that if the Native corporation knows
the state is interested, they may be interested themselves. He
stated it is going to take some time and felt it is in the best
interest of everyone to take time on those overselections. The
state wants to maximize the benefit for everyone. If Native
corporations get resources and develop those resources, that is a
benefit to the state and a benefit generally to some of the poorer
citizens of the state. He stressed it is not a competitive
situation but one where if it is looked at together, there is an
opportunity to maximize the amount of land in the state having
economic potential that the federal government no longer owns.
Number 348
CO-CHAIRMAN GREEN stated the south Barrow gas field has provided
energy to the community of Barrow for some time. He noted there
are many villages that could possibly get into the same situation
and possibly get away from leaking fuel oil tanks. He asked Mr.
Shively to comment on the possibility of the state and someone with
expertise, such as the petroleum industry, trying to develop
alternate energy in the remote areas of the state.
MR. SHIVELY responded there is a lot of opportunity there and added
there is also opportunity with the federal Department of Energy who
is also very interested in shallow gas. He stated there is gas
being generated off of coal which is buried and those gas resources
certainly could be used to lower energy costs. He recalled an
earlier discussion regarding the problems of villages meeting
environmental regulations. He felt there is not enough money in
the state to fix the problems of having rural communities meet the
current federal and state laws as they relate to oil storage.
Therefore, the state is going to have to look for other
alternatives.
REPRESENTATIVE AUSTERMAN made a MOTION to FORWARD the name of John
Shively to the joint committee for confirmation.
CO-CHAIRMAN GREEN asked if there were any objections. Hearing
none, the MOTION PASSED.
ADJOURNMENT
There being no further business to come before the House Resources
Committee, Co-Chairman Green adjourned the meeting at 4:15 p.m.
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