HOUSE RESOURCES STANDING COMMITTEE February 22, 1993 8:00 a.m. MEMBERS PRESENT Representative Bill Williams, Chairman Representative Con Bunde Representative Pat Carney Representative John Davies Representative Joe Green Representative Jeannette James Representative David Finkelstein MEMBERS ABSENT Representative Bill Hudson, Vice Chairman Representative Eldon Mulder COMMITTEE CALENDAR Confirmation Hearings: Big Game Commercial Services Board: Paul Johnson Glen Fredericks Alaska Oil & Gas Conservation Commission: David Johnston WITNESS REGISTER Paul Johnson P.O. Box 22 Elfin Cove, Alaska 99825 Phone: 239-2211 Position Statement: Provided information and answered questions related to his nomination to the Big Game Commercial Services Board Glenn W. Fredericks 1400 Virginia Court Anchorage, Alaska 99510 Phone: 274-2194 Position Statement: Provided information and answered questions related to his nomination to the Big Game Commercial Services Board David W. Johnston 320 Mariner Drive Anchorage, Alaska 99515 Phone: 279-1433 Position Statement: Provided information and answered questions related to his nomination to the Alaska Oil & Gas Conservation Commission ACTION NARRATIVE TAPE 93-22, SIDE A Number 000 The House Resources Committee was called to order by Chairman Bill Williams at 8:05 a.m. Members present at the call to order were Representatives Williams, Carney, Davies, Green, and James. Members absent at the call to order were Representatives Hudson, Bunde, Finkelstein, and Mulder. CHAIRMAN BILL WILLIAMS announced the meeting was being teleconferenced to Anchorage, with the purpose of considering the confirmation of appointees to the Big Game Commercial Services Board and the Alaska Oil and Gas Conservation Commission. The first appointee for consideration was Paul Johnson, appointee to the Big Game Commercial Services Board. Number 040 PAUL JOHNSON, NOMINEE, BIG GAME COMMERCIAL SERVICES BOARD (BGCSB), introduced himself and briefly described his activities on the BGCSB, which regulates the activities of big game guides. He noted he was one of two members on the BGCSB who were also guides. Number 065 CHAIRMAN WILLIAMS asked if any committee members had questions for Mr. Johnson. There were none. He then asked if there was a motion for approval of the confirmation. REPRESENTATIVE JOHN DAVIES made the MOTION to APPROVE the confirmation of Paul Johnson to the BGCSB. Number 074 CHAIRMAN WILLIAMS asked members to indicate if they were in favor of the motion. Members present UNANIMOUSLY VOTED to APPROVE the confirmation. CHAIRMAN WILLIAMS announced the next candidate for confirmation, Glenn Fredericks. Number 092 GLENN FREDERICKS, NOMINEE, BGCSB, testified by teleconference from Anchorage, telling the committee of his background in Native Corporation management, and his representation of the Kuskokwim area. He said he had been appointed to the BGCSB six months ago. CHAIRMAN WILLIAMS noted Representative Bunde had joined the meeting. He then asked if there were any questions for Mr. Fredericks. Hearing none, he asked the committee members if there was a motion. Number 120 REPRESENTATIVE DAVIES made the MOTION to APPROVE the confirmation of Glenn Fredericks to the BGCSB. CHAIRMAN WILLIAMS asked members to indicate their vote on the motion. Without opposition, the confirmation was UNANIMOUSLY APPROVED. CHAIRMAN WILLIAMS introduced David Johnston. Number 140 DAVID JOHNSTON, NOMINEE, ALASKA OIL AND GAS CONSERVATION COMMISSION (AOGCC), testified via teleconference from Anchorage. He advised that he was first appointed to the AOGCC in January, 1989, by former Governor Steve Cowper. In November, 1990, he reported, he was appointed chairman of the AOGCC, and has since been reappointed to a second term by Governor Hickel. He reported that prior to his appointment to the AOGCC, he worked in the Division of Oil and Gas at the Department of Natural Resources (DNR). MR. JOHNSTON told the committee he has a master's degree in engineering and science management from the University of Alaska, and a bachelor's in geology from Montana State University. He then described the activities of the AOGCC, and said when he was originally appointed it was with the goal of revitalizing the AOGCC. The cornerstone of the AOGCC, he reported, was a computerized reservoir surveillance system for management of reservoirs. He said this system allowed detailed production and decline information. Expansion of the field inspection program had also been a major accomplishment of the commissioner during his tenure, he testified. MR. JOHNSTON told the committee the AOGCC has taken on a more outward focus than it previously had. He said the emphasis has been on streamlining administration and on cooperation with other agencies, such as the Department of Environmental Conservation, in relation to naturally occurring radioactive material. He also noted the AOGCC has become active nationally in oil and gas conservation issues. Number 245 REPRESENTATIVE JOE GREEN asked Mr. Johnston to comment on the AOGCC's powers of enforcement over the oil and gas industry, particularly in light of the AOGCC's funding status through oil industry revenues. Number 269 MR. JOHNSTON responded that the AOGCC was an independent agency, and not part of the DNR as some parties have supposed. He pointed out the state's landowner and regulatory enforcement roles were separate, and stressed the need for adequate funding for the AOGCC to meet its statutory obligations. Number 295 CHAIRMAN WILLIAMS noted Representative Finkelstein had joined the meeting. Number 297 REPRESENTATIVE CON BUNDE asked Mr. Johnston to define the AOGCC's relationship with the oil industry. MR. JOHNSTON responded that there was an excellent relationship, and that the AOGCC took its statutory role seriously, and made strong efforts to protect the state's interests. He said the AOGCC found the best approach has been to work with industry to resolve problems and not to put up obstacles to problem resolution. Number 320 REPRESENTATIVE DAVIES returned to the concern about under- funding, and asked Mr. Johnston to comment on specific areas of concern. Number 326 MR. JOHNSTON referred to the state's inspection program, and its expansion from three to five inspectors. The biggest concern, he said, was with the AOGCC's capability to look at management of reservoirs while the AOGCC's staff was limited to one engineer to oversee management of all reservoirs in the state. He compared the staffing to that in the Division of Oil and Gas pre-sale area. Number 336 REPRESENTATIVE DAVIES asked what actions were the state authorized to take if resources were found to be managed improperly. Number 350 MR. JOHNSTON told the committee the AOGCC had the powers to hold public hearings, subpoena records, and levy penalties against industry. He stressed, however, that the AOGCC's practice was to work with industry to address potential problems before they reached the stage where violations needed to be penalized. Number 398 CHAIRMAN WILLIAMS entertained further questions for Mr. Johnston. Hearing none, he asked committee members if anyone would like to put a motion before the committee. Number 405 REPRESENTATIVE DAVIES MOVED that the committee APPROVE the reappointment of David Johnston to the AOGCC. Number 410 CHAIRMAN WILLIAMS asked members to vote in favor of or in opposition to the motion. Without opposition, the MOTION CARRIED and Mr. Johnston's confirmation was approved. ANNOUNCEMENTS Number 420 CHAIRMAN WILLIAMS announced the committee would next meet on Wednesday, February 24, 1993 at 8:00 a.m. to hear HB 133, related to fisheries' taxes. ADJOURNMENT There being no further business to come before the House Resources Committee, Chairman Williams adjourned the meeting at 8:25 a.m.