HJR 12-ENDORSING ANWR LEASING; RELATED ISSUES  2:10:00 PM CHAIR PATKOTAK announced that the final order of business would be HJR 12 HOUSE JOINT RESOLUTION NO. 12, "Urging the United States Department of the Interior, Bureau of Land Management, to honor the recent lease sales and proceed with permitting in the Arctic National Wildlife Refuge; urging the President of the United States to defend the 2020 Record of Decision approving the Coastal Plain Oil and Gas Leasing Program in the Arctic National Wildlife Refuge; opposing designation of the Arctic National Wildlife Refuge as a National Monument; and urging the Alaska delegation in Congress to uphold sec. 20001 of the Tax Cuts and Jobs Act of 2017." 2:10:40 PM REPRESENTATIVE RAUSCHER, as prime sponsor of HJR 12, explained the resolution requests continuation of the oil and gas development program in the Arctic National Wildlife Refuge (ANWR) that was recently put on hold. When the Alaska National Interest Lands Conservation Act (ANILCA) was signed into law in 1980, he said, Congress itself reserved the right to permit oil and gas development and production on the Coastal Plain ["1002 Area"] of the refuge. Within days of the first lease sale in January 2021 President Biden placed the entire leasing and development program on hold, and HJR 12 urges a reversal of that action. REPRESENTATIVE RAUSCHER related that the resolution implores the U.S. Department of Interior Bureau of Land Management (BLM) to honor the recent Coastal Plain oil and gas leasing program and to proceed with permitting in the 1002 Area of the refuge. The resolution also asks President Biden's administration to defend the BLM's 2020 Record of Decision approving the Coastal Plain oil and gas leasing. The resolution asks that when BLM is considering and taking action on the leasing program that it take into account the long history of safe and responsible oil and gas development on the North Slope, as well as the enormous benefits that the development in the refuge could bring to North Slope residents, the state of Alaska, and the nation. REPRESENTATIVE RAUSCHER said HJR 12 also states that the Alaska State Legislature opposes any effort to employ the Antiquities Act to designate the Arctic National Wildlife Refuge as a national monument. It implores President Biden to take an approach of consultation and engagement in these decisions that affect the state, local communities, Alaska Native tribes and entities, and residents. The resolution urges President Biden to immediately rescind the provisions of Executive Order 13990 pertaining to the Arctic National Wildlife Refuge. REPRESENTATIVE RAUSCHER noted that while the Arctic National Wildlife Refuge isn't in his district, he worked on the resolution's language with Chair Patkotak whose district does include the refuge and the North Slope. He stressed that he believes this is a state's rights issue as well as a jobs issue. Development within the refuge could create tens of thousands of jobs across the country and thousands of jobs within Alaska. 2:15:02 PM CHAIR PATKOTAK opened invited testimony. 2:15:17 PM KARA MORIARTY, President and CEO, Alaska Oil and Gas Association (AOGA), testified in support of HJR 12. She paraphrased from the following written statement [original punctuation provided]: AOGA is the professional trade association for the industry and we appreciate the opportunity to testify today on House Joint Resolution 12 (HJR12). This resolution provides specific recommendations that honors the commitment of ANILCA and the will of the majority of Alaskans who support the safe development of the Coastal Plain of the Arctic National Wildlife Refuge (ANWR). The sponsor did a very nice job summarizing the specific actions that need to continue to occur to keeping ANWR as a viable option for long-term development of our oil and gas resources. The Arctic National Refuge was expanded from 9 million acres to over 19 million acres with the passage of ANILCA in 1980, with over 90 [percent] of the region permanently protected as wilderness. However, section 1002 of ANILCA specifically states that a small portion of the Coastal Plain would be set aside for future oil and gas development. There was always the intent that oil and gas could occur one day. It was part of one of the many compromises of ANILCA. The Tax Act of 2017, referenced in HJR12, does limit development to 2,000 acres. To give you perspective, the Dulles International Airport in DC is 12,000 acres, and right here in Alaska, the Ted Stevens International Airport is just over 4,600 acres. So, why are even discussing more oil and gas development down the road? The U.S. Energy Information Administration (EIA) predicts that, by 2050, petroleum and other liquids will continue to supply over 50 [percent] of the energy and fuels in the United States, and the International Energy Administration (IEA) has a similar prediction for global demand. So, if the demand for oil and gas is going to be there at least 30 years from now, why the Coastal Plain? The federal government has described the potential 10-11 billion barrels of oil recovery from the 1002 Area as the most significant oil potential in the United States. And while market conditions and regulatory risk that currently exist were the likely causes of the lack of interest from our members in the 2021 January lease sale, the fact remains that the Coastal Plain is still the largest onshore play on federal land in the entire country. And it is a long-term play. Just because companies did not demonstrate interest two months ago, does not mean it is not an important component of energy supply for years to come. In fact, in 2018 the EIA estimated that production from the Coastal Plain, if it were to occur from 2031- 2050, could reduce U.S. expenditures on crude oil and petroleum products imports by almost $600 billion. One of the last things I would like to stress, and would like to stress the most, is that Alaska's oil and gas industry has a history of safe, effective, and environmentally responsible development of the Arctic spanning over five decades. Development today does not occur the same way as it did 40 years ago. In the 1970's, a typical oil pad would be about 65 acres and the drilling areas underground would extend about three miles. Today, the surface area has shrunk to about 12-14 acres, but with the advancement of technologies and cutting-edge drilling techniques that are often pioneered in Alaska, the drilling now extends to up to 55 miles underground. But, with the advancement of a brand-new drilling rig owned by Alaska Native Corporation Doyon, commonly referred to as "The Beast", Alaska is now home to the largest extended reach drilling rig in North America. Now, drilling can expand another 100 miles, for a total of 154 square miles underground while still maintaining only about a 14-acre gravel pad on the surface. Eventual development of the Coastal Plain will be safe, be good for the country, and will continue to build upon the jobs and revenues the industry has contributed to the State and the local area for decades. 2:21:00 PM TOM WALSH, Past President (2020), Alaska Support Industry Alliance, testified in support of HJR 12. He paraphrased from the following written statement [original punctuation provided]: Thank you for the opportunity to provide testimony on this resolution today on behalf of the Alaska Support Industry Alliance, an organization of which I am the immediate Past President. The Alliance is an Alaskan Trade Organization whose mission is To promote responsible exploration, development and production of oil, gas and mineral resources for the benefit of all Alaskans." The Alliance has a membership of 500+ businesses and individuals, who in total employ over 30,000 workers. Alliance education and advocacy efforts focus on our mission by providing substantiated, credible and valuable information for our members, the public, and decision-makers, such as yourselves. I am honored to inform you today that the subject resolution is very much aligned with the Alliance mission and objectives, and I appreciate this opportunity to outline some of the significant areas of alignment. The resolution is comprehensive in its characterization of the many reasons why exploration and development of ANWR are important to Alaskans and the citizens of the United States, and supports the fact that the activity has been congressionally authorized, and is supported broadly by Alaskans. In fact, it is critical to Alaskans, given the declining oil production and associated revenue stream to the State. The text of the resolution covers all of the key areas aligned with the Alliance mission, but it would require more than my allocated 5 minutes just to read the text. Therefore, I will summarize a few key points in my testimony. Revenue As we all know, the State of Alaska is extremely dependent on revenue gained from taxes and royalty on oil production from our declining asset base. Natural decline of oil production has been aggressively mitigated by our industry partners through massive drilling, enhanced recovery, and deployment of innovative and evolving technology. The cost of producing a barrel of oil in Alaska has always been challenging in comparison to most other hydrocarbon provinces, although our giant field size has provided some relief through economies of scale. As our giant fields decline, and overall production rate diminishes, those economies of scale no longer apply. Simply put, we need more oil production to sustain commercial viability. Successful exploration and production from ANWR can play a key role in extending oil throughput to TAPS [Trans-Alaska Pipeline System], and in supporting Alaska's economic engine. Energy Independence The United States has remarkably reached a point of energy independence, largely based on a resurgence of oil and gas production in the Lower 48 shale basins. This energy independence is fragile and may prove to be fleeting in light of economic and sociopolitical changes[.] The fact remains that our productivity, economic health, and prosperity as a nation rely on affordable energy. There is no doubt that climate change impacts will require a paradigm shift in our energy production and consumption, but there is no light switch to turn on renewable energy. A logical and structured transition from carbon-based fuels to carbon-neutral will require a logical and structured effort to reduce carbon release while we transition to the next source of energy. Alaska can play a major role in this transition, based on our vast natural gas resources, and our carbon sequestration opportunities in depleted subsurface reservoirs. Oil production at ANWR could help as a bridge to access to our natural gas resources, and eventually to gas commercialization of natural gas at ANWR and across the North Slope. The U.S. Geological Survey has estimated potential reserves of nearly 8 billion barrels of oil, and 7 TCF [trillion cubic feet] of gas in the subsurface of the Coastal Plain of ANWR. 2:25:06 PM Jobs Alaska and the nation are suffering from massive unemployment due to the pandemic, magnified in Alaska by the collapse in oil price. We are just now seeing some recovery in oil price, but we all know how reliable that trend has proven to be. We have yet to see recovery in energy sector jobs in Alaska, and Alliance member companies and their employees are impacted particularly severely. Jobs associated with exploration and development of ANWR resources will have significant positive impact for our members, and indeed the benefit to the State of Alaska and the U.S. jobs market will be significant, as evidenced by the activity associated with oil development across the North Slope of Alaska [historically]. We desperately need this jobs engine to help our return to a healthy employment environment. Environmental Stewardship Alliance companies have helped the oil industry in Alaska to be leaders in safe and environmentally sound exploration and development of oil and gas on a global level. We strongly believe that Alaskans can explore for, develop, and produce oil and gas in a more prudent, safe and environmentally sensitive manner than anyone in the world. The Alliance is working to brand this record of safety and environmentally sensitive development on behalf of our industry in Alaska, and the industry has long recognized Alaska as a training ground for their global operations in minimizing impact and footprint associated with oilfield development. We can develop and produce oil and gas from ANWR's Coastal Plain with minimal impact, and with a tiny footprint. We have proved this across the North Slope of Alaska. Access to Resources A fundamental premise of the resolution is that Alaska and Alaskans have a right to benefit from our resource wealth, but we can't benefit from what we cannot access. Alaska is a resource state, from our significant mineral resources to our abundant fisheries, our spectacular natural beauty, and our oil and gas opportunities. We need to develop a more diverse economy, no doubt, but we rely almost exclusively on extraction of our natural resources to drive our economy, and we have since before Statehood. It is rational for Alaskans to expect to benefit from the natural resources with which we've been blessed, and it is reasonable for us to have access to those resources and associated jobs and revenue whether on state, federal or private lands. This resolution makes a clear case for that access. As stated earlier, this resolution is aligned with Alliance mission and objectives, and I believe submittal of this resolution to the identified parties is not only appropriate but required to help make Alaskan's voices heard in this critical time. 2:28:12 PM KATI CAPOZZI, President & CEO, Alaska Chamber of Commerce, testified in support of HJR 12. She spoke as follows: The Alaska Chamber was founded in 1953 and our mission is to advocate for a healthy business environment in Alaska. The chamber has more than 700 members and represents businesses of all sizes and industries from across the state. The Alaska Chamber thanks you for introducing HJR 12 and enthusiastically supports HJR 12. Our top federal priority at the chamber for years has been to support oil and gas exploration and development in Alaska's federal areas and to encourage and support the Alaska Legislature to strongly advocate for responsible development of these valuable resources. Our reason for prioritizing this issue is simple. Developing the 1002 Area of ANWR would provide incredible opportunity for all Alaskans, especially economic opportunities. Responsible development in the 1002 Area would provide an invaluable boost to America's energy security and bring much needed economic growth potential to Alaska at a time when we need it most. Our iconic pipeline also desperately needs new oil the ANWR development could provide. ANWR has incredible potential for oil and gas more than 10 billion barrels by some government estimates. For reference, the Trans-Alaska Pipeline has moved just more than 17 billion barrels of oil since startup more than 40 years ago. So the resource potential in ANWR is truly incredible. A project the size and scope of ANWR would create thousands of high-paying jobs for Alaskans. In addition, with the Point Thomson development fully operational just to the west of ANWR, the 1002 Area is closer than ever to existing infrastructure and could feed into TAPS with a much smaller footprint than in years past. The Alaska Chamber was pleased to see potential development of ANWR making historic progress in recent years. However, with a new administration in Washington, DC, ANWR's future is less certain. We appreciate and applaud the joint resolution's sponsors for sending a strong bi-partisan signal of support for maintaining that momentum and hope our collective Alaskan voices make a difference to federal policy makers. Last but not least, the Alaska Chamber's statewide scientific polling of Alaskans attitudes about ANWR continually show the vast majority of Alaskans support opening a small portion of ANWR to oil and gas development. Two-thirds of Alaskans support it and they have for decades. We thank you for introducing a resolution that stands to improve the business climate and to create jobs here in Alaska at a time when we need it more than ever, and we offer our full support. 2:31:04 PM MARLEANNA HALL, Executive Director, Resource Development Council for Alaska (RDC), testified in support of HJR 12. She said RDC is a statewide business association comprised of individuals and companies from Alaska's oil and gas, fishing, forestry, mining, and tourism industries. She continued as follows: Our membership includes all 12 landowning Alaska Native corporations, local communities, organized labor, industry support firms, and thousands of Alaskans supporting responsible development of Alaska's natural resources. I am here today to express strong support for HJR 12 as it supports the oil and gas lease program that will allow limited activity within the non-wilderness portion of the Coastal Plain of ANWR. ... This legislation well describes measures to properly address ANILCA and the intent to preserve areas in the Coastal Plain for oil and gas development. Further, it is important that we allow for the eventual development, production, and transportation of oil and gas in and from the Coastal Plain that would meet the requirements established by Congress. Alaska depends on the responsible development of its natural resources to expand and support our economy. Alaskans statewide have long supported oil and gas exploration and development in the Coastal Plain. ... Polling has consistently shown 70 percent of Alaskans in support of development of energy resources beneath the 1002 Area. In addition, local residents and the Inupiat people who actually live adjacent to the 1002 Area have also demonstrated support for development. However, we recognize there are special interests that are opposed to any further development of America's energy resources. They advocate for leaving oil in the ground, but even in the era of climate change reality requires continued development of America's oil and gas resources. While ... renewable and alternative energy will make up a growing part of U.S. energy portfolio, it will not significantly reduce our reliance on oil in the near or mid term. We don't deny renewable energy as a growing part of America's portfolio, but it is still only projected to account for a minority of American energy production in 2040. ... New oil and gas production will be required to power America's energy and can serve as a bridge until renewable energy becomes a more dominant energy source decades into the future. Every barrel of oil not developed in Alaska or America will simply be imported from overseas where environmental regulations are often weaker. To further reduce our reliance on foreign sources of oil, America must continue to pursue responsible oil and gas development onshore and offshore Alaska. New production would provide a bridge to the alternative and renewable energy sources of the future. Oil development on a fraction of the Coastal Plain would create thousands of jobs nationwide and in Alaska, generate billions of dollars in government revenues for all public services, ... and further improve energy security for decades into the future. Not only does Alaska need oil and gas development on the Coastal Plain, but the rest of the United States would benefit from it too. Let's fuel America's future with ANWR. 2:35:07 PM MATTHEW REXFORD, President, Kaktovik Inupiat Corporation;, Tribal Administrator,, Native Village of Kaktovik, testified in support of HJR 12. He paraphrased from the following written statement [original punctuation provided]: My name is Matthew Rexford and I represent the community of Kaktovik, the only community inside the Arctic National Wildlife Refuge, known as ANWR (also known and referred to as the Refuge), but more importantly Kaktovik is the only community inside the Coastal Plain area of ANWR the area covered by your Resolution. In many ways, I find it frustrating that ANWR is still an issue of public debate my community has supported oil and gas leasing in the Coastal Plain for many decades and it was not until the Tax Cuts and Jobs Act of 2017 that we were able to realize our vision. I have to admit that I am extreme frustrated that it took seventeen paragraphs before the Kaktovikmiut are even mentioned in HJR No. 12 and that caribou are mentioned before the people. You are speaking of my homeland, our children have been raised in this region and our ancestors are buried here. It seems that the Kaktovikmiut, my people, continue to be overlooked between the arguments over oil and gas and Caribou which in many national discussions we have been erased- yet ANWR would not have been opened without our efforts. Despite my frustration, I am speaking today to urge you to support HJR No. 12 and to state that by doing so you will support the Kaktovikmiut in the farthest northeast corner of the State. We oppose any attempts to designate ANWR as a National Monument. I will keep my comments brief because our list of grievances is long. Our community has continually been caught between federal actions that impactour ability to realize our visions of a vibrant and sustainable future. The Alaska Native Claims Settlement Act of 1974 (ANCSA) was supposed to allow our Kaktovik I?upiat Corporation (KIC) the economic freedoms to develop its lands to benefit our community. However, ANCSA was followed by the passage of the Alaska National Interest Lands Conservation Act of [1980] (ANILCA) which compromised KIC's ability to access and develop its lands. Kaktovik did not want to be an island in the middle of a Refuge but it happened anyway. Having lived in the Refuge since ANILCA I am here to tell you that life has been difficult, and the federal management agency has not performed its duty to our community as required. We would not expect that to change if ANWR was designated a national monument. By example, in February 2020, our school burned to the ground. We immediately applied for an overland permit to move temporary school modules across the coastal plain as an in-holder of the Refuge we have rights under ANILCA that were not provided to us. As a last minute stop-gap measure we were forced to move the modules over the sea-ice to our community which added significant risk to the transport operation. Representative Patkotak, you understand the challenge that we faced as a community to achieve moving modules before we lost the sea ice route. This represents a failure by the Refuge land management agency to acknowledge our rights. We support oil and gas development not only on our lands but on the adjacent federal lands to provide for economic opportunities to our people through jobs and new business development. Our tribe, corporation, and city government all actively participated not only in the public process, but also in government-to- government consultation, of the Environmental Impact Statement (EIS) performed the Bureau of Land Management (BLM) development and supported full leasing of the entire Coastal Plain with the mitigations and stipulation presented in the Record of Decision. Potential development of the coastal plain is not only important for Kaktovik' s economy, but also critical for the long-term economic sustainability of our municipal government, the North Slope Borough (NSB). Without the services the NSB provides Kaktovik, and the other seven communities within the North Slope of Alaska would still be living in third-world conditions. The life expectancy of the I?upiat has increased 13-years since development of oil within our region due to the borough providing for clean water and sanitation in our communities. We can not turn the clock back we are part of the United States and demand first world amenities and until we find something else to provide for our health and economic well-being we are fundamentally a people dependent on resource development. We have been able to come to terms with that paradox while at the same time providing appropriate protections to our subsistence resources and the lands and waters they are dependent on. We recognize that exploration is the first phase of opportunity for our community I am sure that you have seen in the press last week surrounding our inability to receive permits to perform a low-impact seismic program over our lands. Seismic is an important step to determine whether there are potential drillable targets for oil and gas. Due to our location, this was an important project to identify local natural gas targets that could be developed as a long-term energy resource and move our community away from its reliance of diesel and our only energy source. However, again we were thwarted by the federal government to progress toward a sustainable future. Again, I request that you support HJR No. 12. I will also leave you with this request and that is to not forget about the people, my people, in the future. Thank you for your time and invitation. 2:41:33 PM CHAIR PATKOTAK held over HJR 12 and stated that public testimony would be taken at the resolution's next hearing.