CS FOR HOUSE BILL NO. 129(FIN) "An Act relating to approval for oil and gas or gas only exploration and development in a geographical area; and providing for an effective date." 1:48:32 PM AT EASE 1:48:51 PM RECONVENED CHRISTINE MARASIGAN, STAFF, SENATOR KEVIN MEYER, explained HB 129. She stated that the committee had previously heard SB 59, and Section O of that bill was included in HB 129. She explained that the bill had the same material as SB 59, with the addition of Section 1 of HB 129. JOE BALASH, DEPUTY COMMISSIONER, DEPARTMENT OF NATURAL RESOURCES, announced that HB 129 will consolidate the Department of Natural Resources' exploration and development approvals, while still protecting the environment and providing for public participation. The right to explore and develop oil and gas is granted through a lease that has been through an extensive public disposal process. A lease is subject to mitigation measures, multiple agency permits, and plans of operations approval. Exploration and development approvals are made in conjunction with individual plans of operations for a lease or project and include a separate public notice for each approval. Many approvals are repetitive, subject to the same mitigation measures, and within the same geographical area. He explained that HB 129 will allow the department to comprehensively evaluate oil and gas exploration and development in a geographical area, without regard to lease boundaries, and define the criteria by which specific projects are evaluated and approved. The initial comprehensive review of a geographical area gives the public, government agencies and industry an opportunity to participate and identify exploration and development considerations for all subsequent projects. Projects may then move forward within the defined parameters and subject to the lease mitigation measures without additional public review following the geographical area approval process, saving time and resources for both the state and lessee when approving subsequent plans of operations. Approvals covering a broader area would both create efficiencies in the exploration and development review process and provide for the department to look at the overall effects of exploration and development across multiple leases. This bill will still protect the public interest by requiring public notice and an opportunity to comment under AS 38.05.945. Further, it provides certainty to the oil and gas industry that exploration and development projects may proceed within defined parameters. 1:53:43 PM ROSEMARY AUTUANGARUAK, SELF, BARROW (via teleconference), testified against HB 129. She felt that the legislation would restrict her ability to participate in the communication regarding decisions related to oil and gas access. She stressed that activity in the Arctic was very expensive, so it took effort to communicate with various layers in the process to effectively place the concerns. She remarked that if effective participation was restricted, the daily lives of members of the surrounding communities would be negatively impacted. She remarked that traditional cultural activities were often occurring at the same time as oil and gas exploration activities. She stressed the importance of community involvement. 1:58:52 PM LISA WEISSLAR, SELF, JUNEAU, spoke against HB 129. She looked at the findings section of the bill. She remarked that the section was added on the previous Sunday, with limited testimony and no public comment. She remarked that the section was added as a result to the court case that submitted a decision on March 29, 2013. She explained that the Supreme Court issued a decision that examined the constitutional principle that the state's natural resources were to be made available for maximum use consistent the public interest. She remarked that prior court decisions stated that DNR was required to examine new information that became available for a project. She felt that DNR still had a responsibility to analyze, and consider the cumulative impacts through every phase of an oil and gas project; and provide timely and meaningful public notice of DNR's cumulative impact analysis. She continued to discuss a possible amendment to the bill. Co-Chair Meyer shared that Mr. Shine would address the legislative findings. Senator Hoffman asked to receive the amendment that Ms. Weisslar discussed. 2:04:53 PM JAMES SULLIVAN, SOUTHEAST ALASKA CONSERVATION COUNCIL, JUNEAU, testified against HB 129. He remarked that he had already testified against the senate version of the bill. He felt that the problems were apparent in the geographic areas. He pointed out that the areas were not defined in statute, and were very nebulous. He remarked that there had been testimony regarding the size of the areas, which gave the impression that the areas could be as small as a unit. He stressed that there was no specific definition as to the size of the area in the bill, and felt that the allowance gave undue pressure on the public, because they would be unable to provide the needed accurate testimony. Senator Meyer CLOSED public testimony. Co-Chair Meyer asked for more information regarding the findings section. Mr. Balash shared that the findings and intent section was put together by DNR and Department of Law (DOL) in consultation with the Attorney General. He felt that DNR had no reason to question the additions, and shared that DNR was happy with the language in that section. He pointed out that the Supreme Court decision used the verbiage in two places, and remarked that there may be focus on two separate instances within that decision. 2:10:18 PM Co-Chair Meyer shared that there were various testifiers available for more information. Senator Bishop wondered if the bill would slow down development on the North Slope. Mr. Balash replied that he did not believe that the bill would slow down development on the North Slope. Vice-Chair Fairclough did not know of the Supreme Court ruling, and it had been implied that the Attorney General had turned the case around. She felt that there should be an examination of cumulative impact, and sharing that impact with the public. She asked for more information regarding that proposal. Mr. Balash replied that when DNR considers offering state land for lease, a best interest finding is initially required. The best interest finding was required for a disposal of interest for any property that DNR manages. He furthered that the best interest finding was conducted for each sale area, every ten years. He stated that it was a comprehensive document that requires a substantial amount of public notice, public hearing, and decision making. Once the document is completed, the finding is used for the next ten years. For each of the next ten years, there is an annual call for new information to see if there are any additional studies or developments that may change the evaluation. 2:15:15 PM AT EASE 2:16:50 PM RECONVENED Vice-Chair Fairclough looked at page 10 of the Supreme Court decision, and wondered if it references the public notice process. Mr. Balash responded that DNR relied on that statute to serve the best interest of Alaskans. Senator Hoffman queried the differences between the statutes. Mr. Balash responded that the referenced statute were the factors to consider. He remarked that the methods were outlined in a separate statute. Senator Hoffman wondered if there would concern if the cumulative impact analysis were included. He felt that there was a concern regarding public participation in the process. Vice-Chair Fairclough referenced the Alaska Statutes, and stressed that there was required notice for the outlining communities regarding land use. CS HB 129(FIN) was HEARD and HELD in committee for further consideration. 2:22:24 PM AT EASE 2:24:35 PM RECONVENED