CS FOR HOUSE BILL NO. 197(RLS)                                                                                             
     "An  Act   exempting  certain   natural  gas  exploration   and                                                            
     production   facilities  from  oil  discharge  prevention   and                                                            
     contingency  plans and proof  of financial responsibility,  and                                                            
     amending  the  powers and  duties  of the  Alaska  Oil and  Gas                                                            
     Conservation  Commission   with respect  to  those  plans;  and                                                            
     providing for an effective date."                                                                                          
                                                                                                                                
                                                                                                                                
This  was the first  hearing  for this  bill in  the Senate  Finance                                                            
Committee.                                                                                                                      
                                                                                                                                
Co-Chair  Green  stated  that  this bill  would  address  oil  spill                                                            
exemptions for gas wells.                                                                                                       
                                                                                                                                
REPRESENTATIVE  VIC KOHRING,  the bill's  sponsor  on behalf of  the                                                            
House  Special  Committee  on  Oil  and  Gas,  explained  that  this                                                            
legislation  would exempt oil companies  that are drilling  strictly                                                            
for  gas  from  oil  spill  contingency  plans.  Current  State  law                                                            
requires  a  company "that  is  drilling  strictly  for gas  and  is                                                            
drilling  in formations  that contain  only gas"  to develop  an oil                                                            
spill contingency plan.  The development of these plans is expensive                                                            
and time  consuming. It "would  be logical  to exempt gas  drillers"                                                            
from  this requirement.  The  Oil and  Gas  Conservation  Commission                                                            
would be responsible  for making the  determination as to  whether a                                                            
formation contained  oil. The company would be granted  an exemption                                                            
from the oil spill contingency  plan requirement were the Commission                                                            
to determine that the formation did not contain oil.                                                                            
                                                                                                                                
Representative  Kohring  stated that  the bill is  accompanied  by a                                                            
zero fiscal note  from the Department of Environmental  Conservation                                                            
and is supported by the Governor Frank Murkowski Administration.                                                                
                                                                                                                                
1:53:18 PM                                                                                                                    
                                                                                                                                
Co-Chair  Green asked when  the oil spill  contingency plan  statute                                                            
was enacted.                                                                                                                    
                                                                                                                                
Representative  Kohring replied that the oil spill  contingency plan                                                            
was enacted  in  HB 531 in  the year  2003. This  legislation  would                                                            
correct a drafting  error that inadvertently  included gas  drillers                                                            
with  those  that  would  be  required  to  develop  the  oil  spill                                                            
contingency plan.                                                                                                               
                                                                                                                                
1:53:59 PM                                                                                                                    
                                                                                                                                
Co-Chair  Green remarked that  some of the  regulations relating  to                                                            
oil  and gas  drilling  and development  are  "quite  old". To  that                                                            
point, a distinction  between oil and gas might not  have been made.                                                            
                                                                                                                                
1:54:30 PM                                                                                                                    
                                                                                                                                
KEVIN TABLER,  Manager, Land/Government  Affairs, Union Oil  Company                                                            
of  California/Anchorage  requested  that  the Members  support  the                                                            
House Rules  Committee version of  the bill, as it would  "clean up"                                                            
the unintended  and inadvertent drafting error that  was included in                                                            
HB 531 when the definition  of conventional and non-conventional gas                                                            
wells was changed.                                                                                                              
                                                                                                                                
1:55:41 PM                                                                                                                    
                                                                                                                                
Co-Chair Green  understood that hearings  on this bill had  occurred                                                            
in  the House  Committee  on Oil  and Gas  bill, the  House  Finance                                                            
Committee,  the Senate  Resources  Committee  and the  Senate  Rules                                                            
Committee.                                                                                                                      
                                                                                                                                
Representative Kohring affirmed                                                                                                 
                                                                                                                                
1:56:06 PM                                                                                                                    
                                                                                                                                
Co-Chair  Wilken  moved  to  report the  bill  from  Committee  with                                                            
individual recommendations and accompanying fiscal notes.                                                                       
                                                                                                                                
There  being  no  objection,  CS  HB  197(RLS)   was  REPORTED  from                                                            
Committee  with previous zero  fiscal note  #1 dated March  14, 2005                                                            
from the Department of Environmental Conservation.                                                                              
                                                                                                                                
1:56:31 PM