Legislature(2019 - 2020)BUTROVICH 205
02/26/2020 03:30 PM Senate RESOURCES
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| Audio | Topic |
|---|---|
| Start | |
| Confirmation Hearing(s) | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
ALASKA STATE LEGISLATURE
SENATE RESOURCES STANDING COMMITTEE
February 26, 2020
3:31 p.m.
MEMBERS PRESENT
Senator Peter Micciche, Chair
Senator John Coghill, Vice Chair
Senator Click Bishop
Senator Cathy Giessel
Senator Joshua Revak
Senator Jesse Kiehl
MEMBERS ABSENT
Senator Scott Kawasaki
COMMITTEE CALENDAR
CONFIRMATION HEARING(S)
Alaska Oil and Gas Conservation Commission
Jeremy Price - Anchorage
- CONFIRMATION ADVANCED
PREVIOUS COMMITTEE ACTION
No previous action to record
WITNESS REGISTER
JEREMY PRICE, Appointee
Alaska Oil and Gas Conservation Commission
Department of Commerce, Community, and Economic Development
Anchorage, Alaska
POSITION STATEMENT: Testified as appointee to the Alaska Oil and
Gas Conservation Commission.
DAN SEAMOUNT, Geologic Commissioner
Alaska Oil and Gas Conservation Commission
Department of Commerce, Community, and Economic Development
Anchorage, Alaska
POSITION STATEMENT: Testified in support of Mr. Price's
appointment.
ACTION NARRATIVE
3:31:04 PM
CHAIR PETER MICCICHE called the Senate Resources Standing
Committee meeting to order at 3:31 p.m. Present at the call to
order were Senators Bishop, Giessel, Coghill, Revak, Kiehl, and
Chair Micciche.
^CONFIRMATION HEARING(S)
CONFIRMATION HEARING(S):
Alaska Oil and Gas Conservation Commission
3:31:33 PM
CHAIR MICCICHE announced that the only order of business would
be consideration of the governor's appointee to the Alaska Oil
and Gas Conservation Commission (AOGCC), Mr. Jeremy Price.
He asked Mr. Price to make an opening statement regarding his
qualifications and interest in serving Alaska as an AOGCC
commissioner.
3:31:51 PM
JEREMY PRICE, Appointee, Alaska Oil and Gas Conservation
Commission, Alaska Department of Commerce, Community, and
Economic Development, Anchorage, Alaska, stated that he is
honored by his appointment, a role that he takes very seriously.
He said working with the experienced and dedicated professionals
at AOGCC has been humbling.
He detailed that he is an Alaskan, born in Fairbanks and raised
in Salcha. He said he grew up working in a family owned
electrical construction company and learned early the benefits
of hard work. He said he developed an interest in energy issues
at a young age.
He related that he moved to Washington, D.C. in 2005 to work on
Capitol Hill after receiving a bachelor's degree in business. He
devoted his time and attention while there to protecting
Alaskans' interests in oil and gas, infrastructure,
transportation, and appropriations for roads, bridges, ports and
harbors. He noted that he worked with the Prince William Sound
Regional Citizens' Advisory Council (PWSRCAC) to pass
legislation to improve the safety of oil tankers transiting
Prince William Sound. He added that he worked with regulators
from various federal agencies to remove the unnecessary
roadblocks in the way of responsibly developing Alaska's oil and
gas resources. He said he believes that developing resources and
infrastructure while protecting Alaska's environment are not
mutually exclusive objectives.
3:33:27 PM
MR. PRICE detailed that he received a master's degree in
government from John Hopkins University and wrote his thesis on
conventional and renewable energy subsidies.
He said he left the U.S. Senate in 2013 for work at the American
Petroleum Institute (API) where he handled midstream and Alaska
upstream issues. In 2014 he moved back to Alaska to open the
state chapter of Americans for Prosperity (AFP), an organization
that advocates for removing barriers to public lands and
resource development opportunities.
MR. PRICE explained that after Governor Dunleavy was elected, he
was hired as Deputy Chief of Staff where he acted as liaison
with agency commissioners.
He said since becoming public commissioner and chair of AOGCC,
his focus has been on protecting underground freshwater sources,
owners' rights to recover their resource share, and greater
resource recovery through waste recovery and safe drilling
practices.
3:34:58 PM
MR. PRICE stated that this is a critical time for AOGCC.
Drilling permit work orders increased to 191 in 2019, a 6
percent increase over 2018. Each drilling application goes
through a rigorous process at AOGCC. Experienced geologists,
engineers, and inspectors ensure wells are properly cased,
cemented, and pressure tested. AOGCC identifies and mitigates
potential drilling hazards by ensuring proper blowout prevention
is in place with frequent testing and inspections.
He said he would continue the work of his AOGCC predecessors who
created the gold standard for regulatory processes. He pointed
out that Alaska has one of the lowest flaring rates in the
country at 0.3 percent. He added that there are no recorded
instances of underwater drinking water contamination from over
2,000 hydraulically fractured wells since 1963. He noted that
the recovery rate oil throughout the world averages 15 percent,
but the oil recovery rate in Prudhoe Bay is 50 percent with
expectations to achieve 60 percent through 2040.
MR. PRICE explained that under U.S. Environmental Protection
Agency (EPA) oversight, AOGCC has successfully administered an
underground injection control program for more than 30 years.
EPA commended AOGCC in 2019 for its good work in regulating
injection wells. While AOGCC has achieved great progress, the
commission has much work to do, he said.
He said all oil and gas producing states grapple with countless
orphan wells from years of drilling by companies who went
bankrupt without undertaking proper plugging and abandonment
procedures. The Alaska Division of Legislative Audit recommended
in 1991 raising bonds to a level that more closely approximates
the average cost to properly plug an abandoned well. However,
the regulation remained unchanged until 2019 when AOGCC updated
bonding requirements to more closely reflect bankruptcy
liabilities. About 99 percent of the Alaska operators have
complied with the new bonding requirements.
MR. PRICE pointed out that one of the tasks that Governor
Dunleavy put into place upon taking office was to direct all
agencies to identify and repeal outdated and unnecessary
regulations. He reported that in January 2020, AOGCC repealed
seven outdated regulations and will continue to look for
additional efficiencies.
3:37:24 PM
MR. PRICE summarized that since leaving his family electrical
construction business 2005, he has tried to represent the
interests of Alaskans. He reiterated that Alaska is his home and
hopes to raise his family in the state as well. He asked that
the committee support his confirmation to continue serving the
state as AOGCC chairman.
SENATOR BISHOP asked why he thought he was qualified and what
strength he brings to AOGCC.
MR. PRICE answered that his greatest asset is a strong work
ethic. He related that since the first day as commissioner he
realized he had a lot to learn because his oil and gas
experience has been at the federal policy level. He got
textbooks from the AOGCC engineers and geologists and has been
studying them at night to learn the technical aspects. It's a
new experience but one he embraces. He reiterated that work
ethic is his strongest asset.
3:39:29 PM
SENATOR COGHILL asked how his responsibilities as the public
member and as chair interact and how he sees the commission
going forward under his leadership.
MR. PRICE replied he believes the public member should be the
member most attuned to protecting Alaskans' interests in oil and
gas development. He said running hearings as chair and doing
administrative activities allows the geology and engineering
commissioners to delve into the more technical aspects.
He said he expects the commission's workload to increase under
his chairmanship. Increased activity would require greater
diligence to identify staffing or resource needs when that time
comes.
3:41:29 PM
SENATOR KIEHL asked if his family contracting business has any
clients who work in the oil and gas industry.
MR. PRICE answered no.
SENATOR KIEHL asked why he left the governor's administration
for AOGCC.
MR. PRICE answered that he had no plans to leave the
administration, but he has been very interested in the role of
AOGCC commissioner for some time. He said he did not expect the
position to open any time soon, but he told the governor of his
interest. The move was strictly based on the opportunity that
presented itself.
SENATOR KIEHL noted the breadth of his portfolio, including the
governor's office and dealing with various state agency issues
that could impact the oil and gas industry. He asked what his
thought process was since AOGCC has a much narrower focus.
MR. PRICE answered that his career with Congressman Young
covered a wide portfolio that included energy, infrastructure,
and environment. However, the AOGCC position will provide an
opportunity to focus on a narrow scope of issues that he is most
passionate about.
3:43:49 PM
CHAIR MICCICHE read the AOGCC mission statement as follows:
To protect the public's interest in exploration and
development of Alaska's valuable oil, gas, and
geothermal resources through the application of
conservation practices designed to ensure greater
ultimate recovery and the protection of health,
safety, fresh ground waters and the rights of all
owners to recover their share of the resource.
He pointed out that Mr. Price was with API for a couple of years
as Federal Relations Manager. He remarked that he was surprised
to see a letter of support from PWSRCAC. He noted that Mr. Price
worked on requiring dual escort for tug support and asked for
further explanation.
He referenced Mr. Price's professional experience and letters of
support. He remarked that Mr. Price could not help the "Koch
brothers" thing, but the support letters submitted to the
committee are from people that he respects and has worked with
who are very concerned about responsible development.
MR. PRICE explained that when PWSRCAC came to him and others in
the congressional delegation, they said dual-escort tugs for
tankers transiting Prince William Sound was industry practice.
However, PWSRCAC had concerns that the industry would one day
say that one tug was enough. Possible consideration for one tug
was something serious enough for PWSRCAC to ask for help from
Congressman Young to secure federal legislation to require dual-
escort tugs for Prince William Sound. The legislation passed
Congress and signed into law by President Obama. He reiterated
that responsibly developing Alaska's resources while protecting
the environment are not mutually exclusive.
3:46:12 PM
CHAIR MICCICHE addressed Mr. Price's letter of support from
Senator Murkowski and Congressman Young. He noted that the
letter referenced the Colville River Bridge and asked for
details on the project. He conceded that Mr. Price does not have
decades of applicable experience associated with AOGCC but noted
that he has done some work recognized in the letters of support.
MR. PRICE explained that ConocoPhillips asked for assistance
with the EPA regulations regarding Section 404 in the Clean
Water Act (CWA). Section 404 regulates the discharge of dredged
or fill materials into waters. The U.S. Army Corps of Engineers
(USACE) determined that a buried pipeline would be less damaging
alternative to the environment than a bridge. He said he worked
hard on the issue with other individuals at the federal level
that eventually led to USACE agreeing with the Colville River
Bridge alternative.
He said the bridge project is an example of a common bureaucracy
occurrence where federal agencies do not understand all facets
of an issue. He said he facilitated the role of ensuring all
truths are on the table.
3:48:37 PM
CHAIR MICCICHE opened public testimony.
3:49:10 PM
DAN SEAMOUNT, Geologic Commissioner, Alaska Oil and Gas
Conservation Commission, Alaska Department of Commerce,
Community, and Economic Development, Anchorage, Alaska,
testified in support of Mr. Price's appointment. He detailed
that he has been commissioner for over 20 years and worked with
12 to 16 commissioners at AOGCC. He said Mr. Price has the
greatest potential of any commissioner he has worked with. He
noted that the legislature did change the qualifications statute
for the AOGCC public member where the appointee must have an
innate knowledge of the oil and gas industry.
SENATOR REVAK asked if Mr. Price's federal or legal experience
will play any role in his appointment.
COMMISSIONER SEAMOUNT replied that he cannot comment on Mr.
Price's experience in Washington, D.C., but his work for API
involved oil and gas. He noted that Mr. Price puts in his hours
at AOGCC, works late, works weekends, and is serious about his
job. He said Mr. Price brings a lot to the table with his
knowledge of regulations and statutes.
3:52:02 PM
CHAIR MICCICHE said a key requirement is for the three-person
commission to learn to work together productively even when they
disagree. He asked, in the short time Mr. Price has been at
AOGCC, if he had exhibited organizational skills that can carry
forward.
COMMISSIONER SEAMOUNT answered that they work together very
well. He noted that there was one point where Mr. Price was not
in total agreement with the new bonding regulations. After
further explanation and after all the facts were presented, Mr.
Price changed his mind. He shows flexibility so the commission
can reach consensus.
3:53:27 PM
CHAIR MICCICHE found no one else who wished to testify [and
public testimony was closed.]
SENATOR COGHILL moved to advance the appointment to a joint
session for consideration:
Alaska Oil and Gas Conservation Commission
Jeremy Price - Anchorage
CHAIR MICCICHE asked if there were any objections.
SENATOR GIESSEL said there is no need for a motion, the
committee must simply sign the report.
SENATOR COGHILL said the committee may advance the appointment
either way.
3:54:29 PM
CHAIR MICCICHE found no objection and reminded members that
signing the report regarding appointments to boards and
commissions in no way reflects individual members' approval or
disapproval of the appointees; the nominations are merely
forwarded to the full legislature for confirmation or rejection.
3:55:21 PM
There being no further business to come before the committee,
Chair Micciche adjourned the Senate Resources Standing Committee
meeting at 3:55 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| SRES Oil and Gas Conservation Price #1.pdf |
SRES 2/26/2020 3:30:00 PM |
Jeremy Price Confirmatin Hearing |
| JPrice - Written Testimony combined as of 02.25.2020.pdf |
SRES 2/26/2020 3:30:00 PM |
Jeremy Price Confirmation |