04/08/2010 03:30 PM Senate RESOURCES
| Audio | Topic |
|---|---|
| Start | |
| Overview from Conoco Philips | |
| HB210 | |
| HJR40 | |
| HJR26 | |
| HCR10 | |
| Adjourn |
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
| + | HB 210 | TELECONFERENCED | |
| += | HCR 10 | TELECONFERENCED | |
| + | HJR 26 | TELECONFERENCED | |
| + | HJR 40 | TELECONFERENCED | |
| + | TELECONFERENCED |
ALASKA STATE LEGISLATURE
SENATE RESOURCES STANDING COMMITTEE
April 8, 2010
3:35 p.m.
MEMBERS PRESENT
Senator Lesil McGuire, Co-Chair
Senator Bill Wielechowski, Co-Chair
Senator Hollis French
Senator Thomas Wagoner
MEMBERS ABSENT
Senator Charlie Huggins, Vice Chair
Senator Bert Stedman
Senator Gary Stevens
OTHER LEGISLATORS PRESENT
Representative Bryce Edgmon
Representative Cherisse Millett
Representative Jay Ramras
COMMITTEE CALENDAR
OVERVIEW FROM CONOCOPHILLIPS
- HEARD
CS FOR HOUSE BILL NO. 210(RES)
"An Act designating Kinzarof Lagoon as part of the Izembek State
Game Refuge; authorizing a land exchange with the federal
government in which state land adjacent to the Izembek National
Wildlife Refuge and within the Alaska Peninsula National
Wildlife Refuge is exchanged for federal land to serve as a road
corridor through the Izembek National Wildlife Refuge and
federal land located on Sitkinak Island; and providing for an
effective date."
- HEARD AND HELD
CS FOR HOUSE JOINT RESOLUTION NO. 40(RES)
Opposing the proposed designation by the National Marine
Fisheries Service of 3,000 square miles of upper Cook Inlet, the
mid-inlet, all of the inlet's western shores, and Kachemak Bay
as critical habitat for beluga whales.
- HEARD AND HELD
HOUSE JOINT RESOLUTION NO. 26
Urging the United States Congress to adequately fund land
surveys in Alaska in order to issue patents to the State of
Alaska and Alaska Native corporations.
- HEARD AND HELD
CS FOR HOUSE CONCURRENT RESOLUTION NO. 10(RES)
Urging the Governor to exercise all available legal options to
restrain the United States Department of the Interior, National
Park Service, from intruding on the sovereign right of the state
to exercise jurisdiction over navigable water and submerged land
and urging the Governor to allocate sufficient resources to the
Department of Law, the Department of Natural Resources, and the
Department of Fish and Game to defend the state's right to
manage the public use of its navigable water.
- HEARD AND HELD
PREVIOUS COMMITTEE ACTION
BILL: HB 210
SHORT TITLE: IZEMBEK STATE GAME REFUGE LAND EXCHANGE
SPONSOR(s): REPRESENTATIVE(s) EDGMON
04/01/09 (H) READ THE FIRST TIME - REFERRALS
04/01/09 (H) RES
04/08/09 (H) RES AT 1:00 PM BARNES 124
04/08/09 (H) Moved CSHB 210(RES) Out of Committee
04/08/09 (H) MINUTE(RES)
04/10/09 (H) RES RPT CS(RES) 6DP 3NR
04/10/09 (H) DP: OLSON, SEATON, WILSON, EDGMON,
NEUMAN, JOHNSON
04/10/09 (H) NR: GUTTENBERG, TUCK, KAWASAKI
04/11/09 (H) TRANSMITTED TO (S)
04/11/09 (H) VERSION: CSHB 210(RES)
04/13/09 (S) READ THE FIRST TIME - REFERRALS
04/13/09 (S) RES
04/08/10 (S) RES AT 3:30 PM BUTROVICH 205
BILL: HJR 40
SHORT TITLE: COOK INLET/KACHEMAK BELUGA POPULATION
SPONSOR(s): REPRESENTATIVE(s) MILLETT
01/27/10 (H) READ THE FIRST TIME - REFERRALS
01/27/10 (H) RES
02/24/10 (H) RES AT 1:15 PM BARNES 124
02/24/10 (H) Moved CSHJR 40(RES) Out of Committee
02/24/10 (H) MINUTE(RES)
02/26/10 (H) RES RPT CS(RES) 3DP 2NR
02/26/10 (H) DP: P.WILSON, NEUMAN, JOHNSON
02/26/10 (H) NR: SEATON, TUCK
03/01/10 (H) NOT ADVANCED TO THIRD READING SAME DAY
03/01/10 (H) BEFORE THE HOUSE IN SECOND READING
03/01/10 (H) TRANSMITTED TO (S)
03/01/10 (H) VERSION: CSHJR 40(RES)
03/02/10 (S) READ THE FIRST TIME - REFERRALS
03/02/10 (S) RES
04/08/10 (S) RES AT 3:30 PM BUTROVICH 205
BILL: HJR 26
SHORT TITLE: STATEHOOD/ANCSA LAND SURVEY FUNDING
SPONSOR(s): REPRESENTATIVE(s) FAIRCLOUGH
03/18/09 (H) READ THE FIRST TIME - REFERRALS
03/18/09 (H) RES
04/06/09 (H) RES AT 1:00 PM BARNES 124
04/06/09 (H) Moved Out of Committee
04/06/09 (H) MINUTE(RES)
04/07/09 (H) RES RPT 3DP 3NR
04/07/09 (H) DP: WILSON, JOHNSON, NEUMAN
04/07/09 (H) NR: OLSON, SEATON, TUCK
02/15/10 (H) TRANSMITTED TO (S)
02/15/10 (H) VERSION: HJR 26
02/17/10 (S) READ THE FIRST TIME - REFERRALS
02/17/10 (S) RES
04/08/10 (S) RES AT 3:30 PM BUTROVICH 205
BILL: HCR 10
SHORT TITLE: OPPOSE FED. CONTROL OF STATE LAND & WATER
SPONSOR(s): REPRESENTATIVE(s) HAWKER
02/27/09 (H) READ THE FIRST TIME - REFERRALS
02/27/09 (H) RES
03/30/09 (H) RES AT 1:00 PM BARNES 124
03/30/09 (H) Moved CSHCR 10(RES) Out of Committee
03/30/09 (H) MINUTE(RES)
04/01/09 (H) RES RPT CS(RES) NT 6DP 1NR
04/01/09 (H) DP: OLSON, TUCK, SEATON, WILSON,
JOHNSON, NEUMAN
04/01/09 (H) NR: GUTTENBERG
04/10/09 (H) BEFORE THE HOUSE
04/10/09 (H) TRANSMITTED TO (S)
04/10/09 (H) VERSION: CSHCR 10(RES)
04/11/09 (S) READ THE FIRST TIME - REFERRALS
04/11/09 (S) RES
04/15/09 (S) RES AT 3:30 PM BUTROVICH 205
04/15/09 (S) Scheduled but not Heard
04/08/10 (S) RES AT 3:30 PM BUTROVICH 205
WITNESS REGISTER
DAN CLARK, Manager
Cook Inlet Assets
ConocoPhillips Alaska
POSITION STATEMENT: Presented ConocoPhillips overview on Cook
Inlet oil and gas issues.
KAREY LOCKHART
Marathon Oil
POSITION STATEMENT: Was available for questions on Cook Inlet
oil and gas issues.
REPRESENTATIVE EDGMON
Alaska State Legislature
Juneau, AK
POSITION STATEMENT: Sponsor of HB 210
STANLEY MACK, Mayor
Aleutian Seas Borough
POSITION STATEMENT: Supported CSHB 210.
HENRY MACK, Mayor
King Cove, Alaska
POSITION STATEMENT: Supported CSHB 210(RES).
DICK MYLIUS, Director
Division of Mining, Land and Water
Department of Natural Resources (DNR)
POSITION STATEMENT: Supported CSHB 210(RES).
TIM CLARK
Staff to Representative Edgmon
Alaska State Legislature
Juneau, AK
POSITION STATEMENT: Commented on HB 210 for the sponsor.
REPRESENTATIVE MILLETT
Alaska State Legislature
Juneau, AK
POSITION STATEMENT: Sponsor of HJR 40.
JASON BRUNE, Executive Director
Rural Development Council (RDC)
POSITION STATEMENT: Supported HJR 40.
CRYSTAL KOENEMAN
Staff to Representative Fairclough
Alaska State Legislature
Juneau, AK
POSITION STATEMENT: Commented HJR 26 for the sponsor.
REPRESENTATIVE HAWKER
Alaska State Legislature
Juneau, AK
POSITION STATEMENT: Sponsor of HCR 10.
DICK MYLIUS, Director
Division of Mining, Land and Water
Department of Natural Resources (DNR)
POSITION STATEMENT: Commented on HCR 10.
TINA CUNNING
Subsistence and Federal Issues Coordinator
Department of Fish and Game (ADF&G)
Juneau, AK
POSITION STATEMENT: Supported HCR 10.
JOHN STURGEON
Representing himself
POSITION STATEMENT: Supported CSHCR 10.
ACTION NARRATIVE
3:35:00 PM
CO-CHAIR LESIL MCGUIRE called the Senate Resources Standing
Committee meeting to order at 3:35 p.m. Present at the call to
order were Senators Wagoner, French, Wielechowski and McGuire.
^Overview from Conoco Philips
Overview from ConocoPhillips Alaska
3:35:18 PM
CO-CHAIR MCGUIRE announced a presentation by ConocoPhillips as
the first order of business.
3:36:01 PM
DAN CLARK, Manager, Cook Inlet Assets, ConocoPhillips Alaska,
said they operate three assets in the Cook Inlet area: the
Beluga River Unit, the North Cook Inlet offshore unit, and the
Kenai LNG plant in Nikiski. ConocoPhillips operates
approximately 160-170 mmcf/day of natural gas production
currently in the two units.
He said he would give a brief background of the Kenai LNG plant
and discuss the benefits of the continued operation of it. He
said it has been operating for over 40 years and is currently
the only significant industrial user of natural gas in South
Central Alaska. It received a two-year extension to its export
license effective April 1, 2009. This extension provided for
approval to export up to 99 tcf/btus or 99 bcf. During the first
year they exported 27.9 trillion btus.
He said the plant is owned by the Kenai LNG Corporation with
ConocoPhillips owning 70 percent of the shares and Marathon Oil
owning the remaining 30 percent.
MR. CLARK said ConocoPhillips has informed the US Department of
Energy and the Governor of Alaska of their intent to seek an
extension to the export license up to March 31, 2013. The
request will be for existing volumes of natural gas. No increase
in volume for export will be requested for the 99 trillion btus
that was previous authorized; it is only a request to extend the
time available to export the original volume. No extension in
volume will be requested.
The Kenai facility provides about $130 million per year to the
state and local economies. The LNG facility supports about 60
direct jobs and is estimated to support an additional 50
indirect jobs; they account for an estimated $17 million/year in
personal income.
3:39:14 PM
CO-CHAIR MCGUIRE said this export license is the only one in the
United States and many of them had written letters to bolster
the support for this extension.
SENATOR WAGONER asked if he meant billion instead of trillion.
MR. CLARK answered the correct authorized amount is 99 trillion
btus, which is equivalent to 99 bcf. He continued that the
production of gas for feedstock to the LNG facility and the sale
of LNG generate about $60 million/year in royalties and taxes
for the State of Alaska and the Kenai Peninsula Borough.
Furthermore, continued operation of the LNG plant helps to
bridge the gas to the time when local storage options can be
expanded or until other sources of natural gas including North
Slope natural gas becomes available to South Central Alaska.
Additionally, it is important to note the plant has provided and
can continue to provide an invaluable service to the South
Central gas market. The plant owners have diverted natural gas
to local utility markets when unexpected supply interruptions
occur or when peak winter demands are excessive. The continued
operation of the plant allows for a stable production
environment which will significantly reduce the risk of water
influx and associated loss of reserves and deliverability
associated with the shut-in of production. He explained that
during the summer and winter shoulder seasons the utility market
can't absorb the natural gas production the Cook Inlet Basin is
capable of producing. However, during the winter and
specifically during cold spells, when demand increases up to
three-fold, the deliverability of the basin is matched or even
outstripped by utility demand. Shutting-in producing gas wells
can damage the reservoirs and cause the loss of reserves and
deliverability resulting in reduced supply for residential
needs.
He summarized that in addition to jobs and a healthier economy,
continued operation of the plant means natural gas will be
available for local utility providers to meet heat and electric
demands. In the event of supply interruptions because of
excessive peak demand, discontinued use of the LNG facility
would actually mean that less natural gas would be available to
meet utility and residential needs.
3:43:10 PM
SENATOR FRENCH said many constituents are not happy with the
idea of exporting natural gas. He asked him to explain why that
is a good thing and to tell them exactly how much gas sells for
overseas.
MR. CLARK replied that the primary reason it's a good idea to
continue exports is because of the significant swing in demand
from summer (low) to winter (high). If there were no export
market, wells would have to be shut in, which would lead to
water influx and other failures on the well. So even though gas
is physically leaving the state, it allows that production to
continue and be maintained at a high deliverability rate, so
when it's needed it can simply be diverted. In previous years,
the excess deliverability of gas generated jobs and increased
revenues.
He said current sales prices are strong; in Japan it is about
$11/mmbtu. For contrast, this year Enstar's average cost of gas
is about $7/mmbtu.
SENATOR FRENCH said the persistent rumor is that the gas being
sold in Japan is selling for less than what is being charged in
the Anchorage area and he asked Mr. Clark to reassure folks that
is not the case.
3:45:16 PM
MR. CLARK said, with the exception of a handful of months over
past 40 years, the price for gas delivered to Japan has been
higher.
SENATOR WAGONER asked when gas is regasified in Japan, does it
get blended for a higher btu value.
MR. CLARK replied that the exported Kenai gas is considered a
lean LNG (1000 buts/cu. ft.). It has to go to a specific set of
tanks and once it is regasified it is blended into their system.
3:46:37 PM
CO-CHAIR MCGUIRE asked what process Alaskans should look for to
weigh in to support the extension. Is there a public comment
period?
MR. CLARK replied that their current timeline is to submit the
application to the US Department of Energy by the end of May;
then they will start the process which will include a comment
period.
3:47:27 PM
CO-CHAIR MCGUIRE asked if they have considered plans regarding
how the LNG plant might fit into in-state gas line plans.
MR. CLARK answered for long-term continued use of the plant,
which is what he thinks it would be, the compression would have
to be renewed and that requires considerable investment - as
much as a new facility would cost.
3:48:46 PM
CO-CHAIR WIELECHOWSKI asked if he thinks there is enough gas in
Cook Inlet to sustain extension of this facility.
MR. CLARK replied he thinks so. It is evident to him there will
be deliverability beyond local needs for several years. They
would only be exporting what is not needed locally.
CO-CHAIR WIELECHOWSKI said they have heard there could be a
potential crisis in Cook Inlet, and possible brown-outs. Did he
believe that?
MR. CLARK replied that supply volumes have been declining
"pretty significantly." There could be problems during the
coldest days; all systems would have to work optimally to meet
demand, but that would be only a few days out of the year.
Stable production is what is important to meeting those demands.
CO-CHAIR WIELECHOWSKI asked if compressor failure could happen
on the colder days.
3:50:49 PM
MR. CLARK replied yes, that is possible. A major failure would
be a major concern.
CO-CHAIR WIELECHOWSKI asked who owns the compressors and if they
will they be upgraded.
MR. CLARK replied that the 15 or so producing wells in the
Beluga Unit that delivers to Chugach or Enstar flow through the
central compressor there. If that failed it would be a big deal,
but they have backup compressors. A few minutes delay could
occur between events which can create loss in pressure, but that
would be temporary. He didn't know what compression other
producers had.
3:52:20 PM
CO-CHAIR WIELECHOWSKI referenced the "waterfall chart" and asked
if there are enough reserves in Cook Inlet to last for years to
come.
MR. CLARK replied that there is enough for several years; the
questions come up around deliverability. Those really cold days
require things to work very smoothly.
CO-CHAIR WIELECHOWSKI said ConocoPhillips agreed to drill new
wells in the last extension and asked what the result of that
was as well as their plans to drill more wells if this extension
is granted.
MR. CLARK replied that ConocoPhillips proposed to drill two
wells at Beluga River when they got the last extension, and they
did so in 2008. They also drilled another well at Beluga River
in 2009 and three wells at the north Cook Inlet unit. All of
those wells with the exception of one are producing "good
volumes."
3:54:31 PM
CO-CHAIR WIELECHOWSKI asked if he sees the need to drill
additional wells and if he anticipates doing so.
MR. CLARK replied that they are not seeking to add volumes to
export, and didn't see a need to tie additional drilling to
that. The contracts that are signed to sell gas, whether to a
utility or to a buyer in Japan, are what works best to drive
drilling activity.
CO-CHAIR WIELECHOWSKI asked if they get this extension would
they have adequate storage in Cook Inlet.
MR. CLARK replied that the LNG plant provides a virtual storage
because of the ability to divert gas away from the plant, but
for the long term benefit of Cook Inlet, additional underground
storage is needed. When that is in place, it will be another
tool that will allow steady production.
CO-CHAIR WIELECHOWSKI asked what cost is per mcf to extract the
gas and deliver it.
MR. CLARK answered that information is proprietary.
CO-CHAIR WIELECHOWSKI asked if more incentives are needed to
spur more gas storage facilities in Cook Inlet.
MR. CLARK replied that incentives could be helpful, but he
didn't know if any particular incentive would spur that.
CO-CHAIR WIELECHOWSKI asked if new incentives are needed to spur
exploration.
MR. CLARK replied that any incentives that could help improve
the economics of wells would be helpful, but the real challenge
is the size of the market.
3:57:49 PM
CO-CHAIR WIELECHOWSKI asked if ConocoPhillips pays around $60
million/year in royalty and taxes.
MR. CLARK answered yes.
CO-CHAIR WIELECHOWSKI asked how much their overall taxes were
diluted with the "dilution effect of gas."
MR. CLARK answered that he didn't know that answer.
CO-CHAIR MCGUIRE asked how many people are currently employed at
the plant.
MR. CLARK replied about 30 ConocoPhillips personnel at the plant
itself.
CO-CHAIR MCGUIRE asked where they are in the life cycle of their
Japan contract.
MR. CLARK replied that the contract they are currently in
matched up with the current two-year extension. To move beyond
March 31, 2011 will require this contract to be amended or a new
contract.
CO-CHAIR WIELECHOWSKI said he knows the Regulatory Commission of
Alaska (RCA) is concerned that the state had agreed to support
their last extension, because they thought it weakened the
utilities' ability to negotiate a contract. He asked if
ConocoPhillips has contracts with all of the utilities to
provide gas and what was their intent to provide gas to them
before meeting the need for the export license.
MR. CLARK replied that Chugach had just submitted a contract to
the RCA last week that will meet their needs through this
period. Enstar has not yet submitted a contract that meets their
needs, but he understood that they will this week. He didn't
know if it would cover all of their needs, but it was
progressing that way.
4:00:59 PM
CO-CHAIR WIELECHOWSKI said as long as they can meet in-state
needs and get affordable gas to the consumers of Cook Inlet he
is in full support of the extension.
CO-CHAIR MCGUIRE remarked that they are excited at his
announcement and look forward to helping in the explanation to
the public that has been challenging.
4:02:12 PM
KAREY LOCKHART, Marathon Oil, said Mr. Clark covered the issues
adequately and she had no further comments.
HB 210-IZEMBEK STATE GAME REFUGE LAND EXCHANGE
4:02:25 PM
CO-CHAIR MCGUIRE announced consideration of HB 210 [CSHB
210(RES) was before the committee].
REPRESENTATIVE EDGMON, sponsor of HB 210, said this bill deals
with a much publicized effort to establish a 30-mile road
between the communities of King Cove and Cold Bay. It authorizes
the Department of Natural Resources (DNR) to make the
transaction given that the actual land exchange with the federal
government is of unequal values. Title 38 requires the DNR to
authorize land transactions of that nature. Submerged and
tidelands are involved as part of the overall transaction as
well; so the department needs to be able to consummate that.
With the passage of HB 210, he said, further work will need to
be done at the federal level to complete the full authorization
for the construction of the small part of the road that is
missing. The Department of Interior would need to do an
environmental impact study (EIS) and a public interest finding.
He explained that the proposed route goes through about 10 miles
of some bird migration and wilderness areas, which will have to
be approved. He said the most harrowing 10 minute flight he's
ever taken is from Cold Bay to King Cove. With the help of a
hover craft in the last couple of years, transport between the
two areas is easier, but it is very expensive and as well as
cumbersome to keep the hover craft running. For the 750
residents at King Cove this is about accessing the fifth largest
all-weather runway in the state that also happens to be
straddled by both the Gulf of Alaska and the Bering Sea. So, for
them this is a life and safety issue.
4:08:12 PM
CO-CHAIR MCGUIRE confirmed that she has been contacted by people
from that area who are concerned, and she applauded his efforts
to deal with this problem.
CO-CHAIR WIELECHOWSKI said he can understand the health and
safety issue, but this land exchange is controversial because it
is the first time it has been done on a national wildlife
refuge. He asked what kind of community outreach and involvement
process it had been through, and was it acceptable to all
parties.
REPRESENTATIVE EDGMON answered that the land transaction
involves about 60,000 acres versus the 206 acres that comprise
the very narrow one-lane transportation corridor that would
complete the road; the US Fish and Wildlife Service threw in
about 1,600 acres off of Kodiak Island for good measure.
Converting the National Wildlife Refuge into wilderness areas
has been going on since ANILKA was established in 1980, and it
has been happening without any consultation at all with the
community members, fishermen, the tribe or the city. So, the
recent outreach effort has been unprecedented.
SENATOR WIELECHOWSKI asked if most of the organizations,
particularly environmental, have accepted this as a fair
compromise.
REPRESENTATIVE EDGMON replied that the National Public Lands
Bill that was passed in March of last year took a great deal of
effort including that of the Alaska delegation. Certainly, there
was opposition to it. But many sideboards were enacted around
the construction of the road - a single-lane gravel road, steel
cables on both sides, specified turnouts, and a road design that
has to meet the EIS. Further sideboards are the state process
and public interest finding.
4:12:04 PM
STANLEY MACK, Mayor, Aleutian Seas Borough, Alaska, said he
lives in Sand Point, but also lived in Cold Bay for years. He is
a commercial fisherman and supported HB 210. It is the final
step in a long legislative process authorizing a trade of state
and King Cove Corporation land to the federal government in
exchange for approving a small road through the Izembek National
Wildlife Refuge.
The road corridor will allow for a one-lane gravel road so the
residents of King Cover will finally have a safe and dependable
access to Cold Bay Airport. Not all of the transportation
challenges can be resolved, but King Cove's problem is different
because it can be solved. He couldn't express how happy he is to
think that this is going to happen in his lifetime. It
represents a successful partnership between state and local
government to achieve.
4:16:25 PM
HENRY MACK, Mayor, King Cove, Alaska, said he supported CSHB
210(RES). He said he had lived most of his life in King Cove and
was a commercial fisherman for 40-plus years. This road has long
been in the making since 1976 when they first adopted a
resolution identifying the need. King Cove's small plane airport
is unusable 30 to 40 percent of the time due to high winds. This
will resolve the problem for many people whose lives are
impacted by the lack of reliable access to the Cold Bay Airport.
4:19:56 PM
DICK MYLIUS, Director, Division of Mining, Land and Water,
Department of Natural Resources (DNR), said under AS 38.50 his
division is responsible for conducting land exchanges involving
state land and they support this legislation. It is before them
for two reasons. The first one is that AS 38.50.020 requires
legislative approval of land exchanges for other than equal
appraised fair market values and secondly, one of the provisions
of this exchange is that certain state tide and submerged lands
would be added to the Izembek State Game Refuge.
He said a road from King Cove to Cold Bay has been talked about
for many years and DNR's original Bristol Bay area plan adopted
25 years ago identified the need for this corridor. Regional
transportation prepared by the Department of Transportation and
Public Facilities (DOTPF) has also identified this need. Several
years ago the Aleutian Seas Borough, City of King Cove, King
Cove Village Corporation, Governor's Office and DNR agreed to
revive the discussions about a land exchange to enable
construction of the road and it was largely because borough
leaders had found that the hover craft was not providing a safe
economical long-term solution to King Cove's access needs. So,
the state, the borough, the city and corporation met with the US
Fish and Wildlife Service to develop the land exchange that is
before them now.
MR. MYLIUS said the parties all recognize that the biggest
hurdle for such a land exchange would be securing approval of
the Congress, because it involves federal wilderness refuge
lands. The exchange legislation was introduced by Lisa Murkowski
and Representative Young in 2007; Governor Palin wrote letters
in support, the state testified before the House Committee on
Natural Resources and the land exchange which was originally a
separate piece of legislation was wrapped into the Omnibus lands
bill that was considered late in 2008, and passed in 2009 and
signed into law by President Obama in March.
In putting together the exchange, he said it was clear that due
to concerns over the unique wildlife and wilderness values of
the refuge that a simple fair market value would not adequately
address the public's and Congress' concerns for those values.
So, it was determine at the start that the package would require
state legislative approval. Statute already requires legislative
approval for exchanges for other than an equal appraised fair
market value.
The existing values of most of these parcels of land are
wilderness and wildlife values which are difficult to quantify
in a land appraisal, and similarly with health and safety
concerns of the local residents, the primary reason for the
road.
Acreage-wise the exchange is clearly skewed in favor of the US
Fish and wildlife Service. The state will acquire approximately
206 acres in the road corridor and about 1,600 acres on Sitkinak
Island; US Fish and Wildlife Service will acquire 43,000 acres
of state land that will be added to the National Wildlife
Refuge, 2,500 acres of Native corporation land and another 5,430
acres of Native corporation selections that will be
relinquished. In addition, the King Cove Native Corporation has
agreed that it will sell additional land to the US Fish and
Wildlife Service at fair market value should the service desire
to purchase that land.
In addition to the road corridor, the state will acquire a 1,600
acre parcel on Sitkinak Island which is located south of Kodiak
Island; the remainder of that island is already state or borough
land used for grazing. The 1,600-acre parcel is a former Coast
Guard facility. The value of the two townships the state would
trade to the US Fish and Wildlife Service primary is primarily
wildlife habitat for fish, caribou and brown bear. These lands
drain the western side of Pavlov Volcano and have been offered
for oil and gas leasing in previous state lease sales but have
received no bids. State geologists say that the likely oil and
gas resources lie further north or offshore of these parcels.
4:24:44 PM
MR. MYLIUS said the second provision requires approval by the
legislature for adding 3,000 acres of state tide and submerged
lands in Kinzarof Lagoon, at the head of Cold Bay, to the state
game refuge. These lands have resource values similar to Izembek
Lagoon including valuable eel grass beds, which are critical for
water fowl that migrate through or reside in the area. He said
the department and the governor support this legislation.
SENATOR FRENCH moved to adopt the proposed Senate committee
substitute (SCS) to CSHB 210, labeled 26-LS0788, Version E, as
the working document of the committee. There being no objection,
the motion carried and SCS CSHB 210() was before the committee.
TIM CLARK, staff to Representative Edgmon, explained the
differences. He said the SCS is comprised of three lines on page
5, line 27, that say: "The construction and operation of the
road described in (b)(1) of this section is authorized after the
state receives the land described in (b)(1) of this section in
accordance with PL11-11(Ombibus Public Land Management Act of
2009)."
The reason for this minor addition was to make it clear that
construction and use of the road is allowed if the exchange is
authorized. It is similar to access provisions in existing state
law affecting other state game refuges including the Mendenhall
Wet Lands State Game Refuge and the Goose Bay State Game Refuge.
What might not be immediately clear is that the Izembek National
Refuge is actually super-imposed over a state game refuge, so
while the corridor becomes state land, it also becomes arguably
state game refuge land. This being similar to other provisions
for access in state game refuges they thought it seemed prudent
to add it to the bill.
4:28:30 PM
MR. CLARK said it is rather complex for a seven-page bill,
mainly because this bill answers the three mechanisms in the
federal legislation that can render the exchange null and void:
a finding by the Secretary of the Interior that the exchange is
not in the public interest, a voluntary rendering of null and
void by the state or the Native Corporation made before
construction of the road commenced, and if permitting of the
road was not accomplished within seven years of the federal
act's passage. The clock began in March 2009 when the President
signed the legislation. The challenging structure is if for any
reason the exchange is voided, there is no need to revisit
statute to ensure that all involved lands are returned to their
original status. But if that is not the case, the legislature is
saved the trouble of having to convene to dismantle any of the
transactions.
CO-CHAIR MCGUIRE, finding no further comments, closed public
testimony and set the bill aside.
4:31:54 PM
At ease from 4:31-4:33.
HJR 40-COOK INLET/KACHEMAK BELUGA POPULATION
4:33:07 PM
CO-CHAIR MCGUIRE brought the meeting back to order and announced
consideration of HJR 40 [CSHJR 40(RES) was before the
committee].
REPRESENTATIVE MILLETT, sponsor of HJR 40, said this resolution
opposes the proposed designation by the National Marine
Fisheries Service (NMFS) of 3,000 square miles of upper Cook
Inlet as a critical Beluga habitat area. She said the critical
habitat designation is part of the Endangered Species Act (ESA)
process, and the Belugas were designated as endangered species
in October 2008. The ESA requires consideration of listing
endangered species habitat as critical habitat. The NMFS
designated the whole 3,000 square miles from Upper Cook Inlet
all the way down to Homer as Beluga habitat, and HJR 40 opposes
that as being excessive.
REPRESENTATIVE MILLETT explained that the ESA allows for
economic consequences in considering the critical habitat
listing and she believes the NMFS grossly underestimated that at
$600,000. Instead she said this critical habitat designation
would encompass everything from the Port of Anchorage to fishing
grounds outside of Homer and Kenai to oil and gas exploration
and any type of construction or resource development that would
take place across the Inlet, which would jeopardize not only Mt.
Spurr, but Chakachamna/Susitna and coal gasification projects.
She learned that the west side of Cook Inlet was listed as
critical habitat and there had been only one sighting of a
Beluga whale there in the last 10 years. Also, she said, NMFS
only counts them once a year by doing an aerial flight, and
juvenile Belugas aren't counted because they are the color of
mud and look like waves.
REPRESENTATIVE MILLETT said this listing would also severely
limit the products that can come into Anchorage as well as oil
and gas exploration in Cook Inlet. All three of Alaska's
delegation oppose this designation and that she entered the
resolution during the NMFS public comment period.
She said back in the 1990s a subsistence hunt took place not
realizing there was a delicate balance between the subsistence
harvest and the Beluga population. In 1998 a harvest management
plan was established and since then the Belugas have shown an
increase in numbers. The NMFS has stated that the reason for the
decline was overharvesting.
4:37:58 PM
SENATOR FRENCH asked her what she thinks would be a more
reasonable designation.
REPRESENTATIVE MILLETT said there is no opportunity to have
public comment and she is not a biologist; it is a tool of the
NMFS. She believes the west side of Cook Inlet should not be
included.
SENATOR FRENCH asked if she thinks the west side of the Inlet
should be excluded.
REPRESENTATIVE MILLETT said her preference is no designation.
She believes the Belugas "are coming back" because the
subsistent hunts are done, and it will take them a little while
to rebound. The NMFS has said it will take 10-15 years to have
the population increase. She believed having a harvest
management plan in place with a take of two Belugas a year is
already working well enough.
SENATOR FRENCH said he heard a good presentation by Jason Brune
[executive director, Rural Development Corporation (RDC)] about
this a few years ago, and he wondered what the population was in
the 1980s when the subsistence harvest took place.
4:40:19 PM
REPRESENTATIVE MILLETT answered that the Beluga population
started out at 1,300 in the 80s, in 1994 it was 653, and in 1998
it was 347, which is when the subsistence harvest took place. In
2004 the population was 366, in 2005 it was 278, and in 2009
they rebounded to 321. There has not been a 2010 count yet. They
have increased by an average of about 4 percent per year since
the subsistence management plan was put in place.
SENATOR FRENCH said it sounds like part of the problem is that
NMFS only does one count a year. He asked if they should be
appropriating more money to count Beluga whales more often.
REPRESENTATIVE MILLETT replied that she has asked NMFS to
increase its counts and to include juveniles, although she
doubts she has much influence.
SENATOR WAGONER said he fished that Inlet for the better part of
40 years, and some years you would see a lot of Belugas, some
years you wouldn't. The only place you could count them is in
lower Cook Inlet and the only time you could count them is when
the food is in. For the scientists to say this is a sub-species
is something he doesn't believe. As for the numbers, if they
studied the food source, they could get a good idea about how
many Belugas are going to be there.
4:43:27 PM
CO-CHAIR MCGUIRE said this is just another way the Endangered
Species Act is being used by the federal government, and she
hoped they would depend on the state in which they are making
the designation for their data.
4:44:20 PM
JASON BRUNE, Executive Director, Rural Development Council
(RDC), said he concurred with Senator Wagoner's and Senator
French's statements and that he supported HJR 40.
CO-CHAIR MCGUIRE asked him to provide his written comments. She
closed public testimony and set HJR 40 aside.
HJR 26-STATEHOOD/ANCSA LAND SURVEY FUNDING
4:45:27 PM
CO-CHAIR MCGUIRE announced consideration of HJR 26.
CRYSTAL KOENEMAN, aide to Representative Fairclough, sponsor of
HJR 26, said at statehood Alaska was granted a land entitlement
from the federal government of approximately 103 million acres.
Alaska Natives, through the Alaska Native Claims Settlement Act
(ANSCA), were granted a land entitlement from the federal
government of 45 million acres. Currently, Congress is not
sufficiently budgeting the enough funds to the US Bureau of Land
Management for the timely completion of land surveys for lands
that were promised to the Natives in the State of Alaska. It was
supposed to be done by the 50th statehood anniversary, which has
come and gone.
4:47:08 PM
CO-CHAIR MCGUIRE noted that there is an amendment in the packet
and asked if she supported it.
MS. KOENEMAN answered absolutely, and that the amendment had
updated numbers since the resolution was first introduced last
year.
CO-CHAIR MCGUIRE moved to adopt Amendment 1.
26-LS0739\R.2
Bullock
AMENDMENT 1
OFFERED IN THE SENATE
Page 2, line 8:
Delete "December 31, 2008, more than 66,000,000"
Insert "January 31, 2010, more than 57,000,000"
Page 2, line 9:
Delete "40,000,000"
Insert "42,000,000"
Page 2, line 10:
Delete "14,000,000"
Insert "15,000,000"
Page 2, line 11:
Delete "12,000,000"
Insert "7,000,000"
There being no objection, the motion carried.
CO-CHAIR WIELECHOWSKI asked what the importance is of getting a
land patent.
MS. KOENEMAN replied that she would get an official response
back to him, but it makes the land transfers easier.
4:48:52 PM
CO-CHAIR MCGUIRE finding no further testimony, closed public
testimony and held HJR 26 as amended.
HCR 10-OPPOSE FED. CONTROL OF STATE LAND & WATER
4:49:20 PM
CO-CHAIR MCGUIRE announced consideration of HCR 10 [CSCHR
10(RES) was before the committee].
4:49:30 PM
REPRESENTATIVE HAWKER, sponsor of HCR 10, said the issue behind
this resolution was brought to him by a constituent and is about
the state's ownership of its submerged lands and navigable
waters. It is something that is guaranteed by law, the state's
constitution, and subsequent interpretations unless there is a
specific federal override.
He explained that back in 1996 the National Park Service started
adopting regulations which improperly extend its own claims of
management and enforcement authorities over state-owned
navigable waters within the units of the National Park System.
As evidence he offered a letter from the Alaska Citizen's
Advisory Commission on Federal Areas, dated February 13, 2009.
The Commission identified and analyzed this problem and asked
the governor to file a lawsuit challenging the regulations.
Senator Therriault and Senator Bunde were potential sponsors of
legislation - one of which is gone and the other one almost gone
- so it fell to him to offer it.
REPRESENTATIVE HAWKER said the Commission recognizes the state
is done with attempts at administrative remedies and wanted to
go to court for a legal remedy. That language was toned down in
the resolution, and it now asks the administration to "take all
available actions".
SENATOR FRENCH asked if there is an interplay between this issue
and the Katie John case.
4:54:51 PM
DICK MYLIUS, Director, Division of Mining, Land and Water,
Department of Natural Resources (DNR), replied generally not.
They both deal with navigable waters, but the Katie John case
deals with federal reserve water rights and this deals with a
park service regulation.
SENATOR FRENCH asked if anyone else might have any more to add.
TINA CUNNING, Subsistence and Federal Issues Coordinator,
Department of Fish and Game (ADF&G), agreed HCR 10 has nothing
to do with the Katie John case, which has to do with only
locating where the federal subsistence priority applies in state
waters. The National Park Service regulations issue is an ANILCA
case related to where federal regulations that are promulgated
for the management of federal lands can apply off of federal
lands onto state waters.
CO-CHAIR MCGUIRE adjourned and then immediately called the
meeting back to order to allow Mr. Sturgeon to testify.
4:56:55 PM
JOHN STURGEON, representing himself, supported CSHCR 10. He said
the State of Alaska owns its submerged lands designated as
"navigable." This includes rivers such as the Yukon. Several
years ago when he was hunting on the Yukon, he was stopped by
the National Park Service police and was told he could not drive
his 5X10 ft. hover craft down the Yukon. They said they had
legal jurisdiction even though they admitted he was on state
land. Later, when he returned to Anchorage he learned that the
state constitution, the statutes, and regulations all very
clearly say the State of Alaska has management authority on its
navigable waters. In addition, he learned that Section 103(c) of
ANILCA says on ANILCA designated units federal conservation unit
regulations do not apply to state and private land. It was an
ANILCA promise that was ignored. He said it is of little use for
the State of Alaska to own its submerged lands on navigable
waterways if the National Park Service is going to override its
management.
4:58:35 PM
CO-CHAIR MCGUIRE closed public testimony and set HCR 10 aside.
Finding no further business she adjourned the meeting at 4:59
p.m.
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