HJR 9-ENDORSING ANWR LEASING  1:46:55 PM VICE CHAIR HAWKER announced that the next order of business is HOUSE JOINT RESOLUTION NO. 9, Urging the United States Congress to pass legislation to open the coastal plain of the Arctic National Wildlife Refuge to oil and gas development; urging the United States Department of the Interior to recognize the private property rights of owners of land in and adjacent to the Arctic National Wildlife Refuge; relating to oil and gas exploration, development, production, and royalties; and relating to renewable and alternative energy technologies. CO-CHAIR TALERICO, sponsor, stated that Joshua Banks of his legislative staff would introduce HJR 9. 1:48:34 PM JOSHUA BANKS, Staff, Representative Dave Talerico, Alaska State Legislature, on behalf of Representative Talerico, sponsor, introduced HJR 9. He said that when Congress passed the [1980] Alaska National Interest Lands Conservation Act (ANILCA), a small section of land within the Arctic National Wildlife Refuge was set aside for future resource development. Known as the "1002 study area", this section makes up 1.5 million acres, or 8 percent, of the refuge. Under ANILCA, Congress must give its approval for oil and gas development in the 1002 area or for designating it as Wilderness. Though there have been many attempts to receive congressional approval for drilling the 1002 area, none have been successful. Therefore, HJR 9 serves as continued encouragement for Congress to approve this drilling. There are multiple reasons for supporting development of the 1002 area. First, the land within the 1002 area that would likely be developed for oil makes up 1 percent of the 1002 study area and 0.08 percent of the entire refuge, leaving 99.92 percent of the refuge free from oil development. Additionally, with today's drilling technology, the footprint for drill pads continues to be even smaller and the volume of oil that one pad can get from the ground continues to increase. 1:50:25 PM MR. BANKS continued, stating that even though oil drilling has been ongoing in Prudhoe Bay for decades where the Central Arctic Caribou Herd migrates, the herd's population has increased from 5,000 to 67,000 caribou. Thus, despite intense drilling on the North Slope, Alaska's caribou herds have not been negatively affected and drilling can continue to happen in Alaska without hurting caribou and without harming Native subsistence rights. MR. BANKS stated that as oil flow in the Trans-Alaska Pipeline System (TAPS) continues to decline down to nearly 500,000 barrels per day, the need for new oil continues to be great. Opening the Arctic National Wildlife Refuge would allow an estimated 700,000 barrels per day of oil at the peak to flow down TAPS and increase the life of this valuable piece infrastructure. According to the 2002 McDowell Group report (provided in the committee packet), even at $24 per barrel, Alaska could receive up to $500 million per year in royalties from the Alaska National Wildlife Refuge. MR. BANKS noted that HJR 9 is very similar to resolutions that have been passed by the legislature, with only a few minor changes from the resolution passed two years ago in the 28th Alaska State Legislature. Primary changes consist of who the resolution is addressed to, including U.S. Senator Dan Sullivan and specifying that U.S. Senator Lisa Murkowski is chair of the U.S. Senate Energy and Natural Resources Committee. Another change is on page 2, line 13, where instead of a generic gas pipeline, the Alaska liquefied natural gas project begun under Senate Bill 138 is specifically named. Also added is the daily oil flow of up to 700,000 barrels per day that could come from the Alaska National Wildlife Refuge, which is an estimate done by the U.S. Department of Energy. Lastly, two "be it resolved" clauses in the past resolution were very similar, so HJR 9 has combined those into one clause. 1:53:08 PM REPRESENTATIVE JOSEPHSON observed that the last resolve [page 4, lines 16-20] talks about the 90/10 split and the state's resistance to suffering a coercion from the federal government. He said his understanding has always been that the 90/10 split refers to state land and that is why everyone applauds the Department of Natural Resources (DNR) for selecting the Prudhoe Bay area for state ownership in the late 1960s. He asked whether it is meant that the state should not accept less than that on federal land even though the statehood compact doesn't suggest that the state is entitled to more than 10 percent. MR. BANKS replied that his understanding of the Statehood Act is that the state receives 90 percent of royalties and he believes that is what is being encouraged in the resolution. VICE CHAIR HAWKER inquired whether Representative Josephson has specific language in HJR 9 that he is looking at. REPRESENTATIVE JOSEPHSON responded that he is looking at the language on page 4, lines 18-19. 1:54:58 PM REPRESENTATIVE JOSEPHSON then drew attention to the whereas clause on page 2, line 26. After re-reading the clause he said he had no question. 1:55:54 PM VICE CHAIR HAWKER related the history regarding the issue of the state being forced to take less than the 90 percent it was provided under the Statehood Act. He explained that at one point in time there was talk of a 50/50 split between the state and the federal government [in return for opening the 1002 area to development], rather than the 90/10 split the state is entitled to, as a way to move a transaction forward. Thus, that provision in HJR 9 is looking at an historic event that was once suggested. REPRESENTATIVE SEATON clarified that the 90/10 split is on federal land, not on state land. Other than on federal land, the state gets 100 percent of the royalty. VICE CHAIR HAWKER further clarified that that is on federal lands within the state of Alaska. 1:57:46 PM REPRESENTATIVE TARR drew attention to page 2, [lines 6-7], which state, "our nation's dependency on oil produced by hostile foreign nations". She urged care with that language because Alaska's number one trading partner is Canada and with whom the state has a great relationship. Also, she continued, the U.S. will achieve energy independence this year for the first time and that is also the outlook for the future. 1:58:27 PM VICE CHAIR HAWKER opened public testimony on HJR 9, but closed it after ascertaining no one wished to testify. 1:58:52 PM VICE CHAIR HAWKER pointed out that HJR 9 already includes the provision to distribute copies to all members of Congress. He further noted there is no fiscal note associated with HJR 9. REPRESENTATIVE JOHNSON said that during consideration of HJR 10, he observed a statement that only 250 people visited the Coastal Plain on a yearly basis. It is pointed out that the beauty of the Coastal Plain will be ruined, he added, but only 250 people is not an onslaught of tourism. VICE CHAIR HAWKER noted that there is only one small village in the Coastal Plain designated as the Arctic National Wildlife Refuge. He said that that village probably does not have the capacity to take more than one or two people at a time, so it is not a tourist mecca. It is basically a saturated sponge and a breeding ground for mosquitoes. 2:01:06 PM REPRESENTATIVE OLSON moved to report HJR 9 out of committee with individual recommendations [and the accompanying zero fiscal note]. There being no objection, HJR 9 was reported from the House Resources Standing Committee.