ALASKA STATE LEGISLATURE
HOUSE RESOURCES STANDING COMMITTEE
February 11, 2015
1:07 p.m.
MEMBERS PRESENT
Representative David Talerico, Co-Chair
Representative Mike Hawker, Vice Chair
Representative Bob Herron
Representative Craig Johnson
Representative Kurt Olson
Representative Paul Seaton
Representative Andy Josephson
Representative Geran Tarr
MEMBERS ABSENT
Representative Benjamin Nageak, Co-Chair
COMMITTEE CALENDAR
OVERVIEW(S): POINT THOMSON
- HEARD
HOUSE BILL NO. 70
"An Act adding land and water to the Creamer's Field Migratory
Waterfowl Refuge."
- MOVED CSHB 70(RES) OUT OF COMMITTEE
PREVIOUS COMMITTEE ACTION
BILL: HB 70
SHORT TITLE: CREAMER'S FIELD REFUGE
SPONSOR(s): REPRESENTATIVE(s) WOOL
01/21/15 (H) READ THE FIRST TIME - REFERRALS
01/21/15 (H) RES
02/11/15 (H) RES AT 1:00 PM BARNES 124
WITNESS REGISTER
GOVERNOR BILL WALKER
State of Alaska
Juneau, Alaska
POSITION STATEMENT: Spoke in regard to Point Thomson.
REPRESENTATIVE ADAM WOOL
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: As the sponsor, introduced HB 70.
DAVID DUNSMORE, Staff
Representative Wool
Juneau, Alaska
POSITION STATEMENT: On behalf of Representative Wool, sponsor,
outlined the changes made by the proposed committee substitute
for HB 70.
MARK HALL, Land Surveyor
Division of Mining, Land and Water
Department of Natural Resources
Anchorage, Alaska
POSITION STATEMENT: Answered questions related to HB 70.
DAVID JAMES, Fish and Game Coordinator
Division of Wildlife Conservation
Alaska Department of Fish & Game
Fairbanks, Alaska
POSITION STATEMENT: Answered questions related to HB 70.
ACTION NARRATIVE
1:07:09 PM
CO-CHAIR DAVID TALERICO called the House Resources Standing
Committee meeting to order at 1:07 p.m. Representatives Herron,
Josephson, Johnson, Seaton, Tarr, Olson, Hawker, and Talerico
were present at the call to order.
^OVERVIEW(S): Point Thomson
OVERVIEW(S): Point Thomson
1:08:09 PM
CO-CHAIR TALERICO announced that the first order of business is
an overview of Point Thomson. He related that the committee had
requested the Department of Law to provide an overview and
update regarding the Point Thomson litigation process. However,
he explained, Alaska Governor Bill Walker requested that he be
able to personally address the committee about Point Thomson.
1:09:19 PM
GOVERNOR BILL WALKER, State of Alaska, paraphrased from the
following written statement [original punctuation provided with
some formatting changes]:
Mr. Chairman and members of the committee, you asked
for someone from my Administration to testify on the
Point Thomson lawsuit that I brought several years ago
as a public interest litigant. I am here to talk to
you directly about this and set the record straight.
Let's talk first a bit about how we got here, and why
I brought this public interest lawsuit.
In 1975 and 1977, the first wells were drilled at
Point Thomson. Since then, we have known that the
Point Thomson area is rich in oil and gas.
It is one of Alaska's natural resource crown jewels.
The field contains trillions of cubic feet of natural
gas reserves, and hundreds of millions of barrels of
oil and condensate. It's a resource that is worth
billions of dollars to the state and means thousands
of jobs to Alaskans.
That wealth has been kept from the market and from
Alaskans for decades.
Here are some numbers, and a history of how that
happened.
The Point Thomson unit is 93-thousand acres of land.
That land contains 38 leases.
Richfield Oil, Humble Oil and BP acquired the very
first oil and gas leases in Point Thomson in 1965.
Twelve years later, Exxon discovered very substantial
oil and gas in the main Point Thomson reservoir.
In 1977, the state approved ExxonMobil as the unit
operator.
For 22 years, Exxon presented 22 individual plans of
development -one each year-for the Point Thomson unit.
Yet, no development occurred.
So in 2005, as the state was evaluating yet another
Plan of Development-the 23rd POD-I brought a lawsuit
against the state on behalf of citizen taxpayers. The
relief sought was for the state to at least hold a
public hearing on why the state should or should not
grant yet another POD when no development had taken
place at Point Thomson since 1983.
As a result of that lawsuit, a hearing was held where
I was able to present witnesses, which included
Governor Wally Hickel and one of our constitutional
drafters Vic Fisher, and shortly after that, the
Murkowski administration rejected the POD and put the
Point Thomson unit in default.
In 2008, DNR notified the lease holders that their
leases had expired. In order to keep several leases
in the Point Thomson unit, Exxon then agreed to drill
the first new Thomson wells in more than two decades.
That initial lawsuit was an important catalyst leading
to development in Point Thomson today.
In May of 2012, the State released a signed settlement
of the Point Thomson dispute but the terms of the
settlement violated the Alaska Constitution and Alaska
Law. Alaska's Constitution and statutes are very
specific about the public process required in the
development of our natural resources because the
citizens of Alaska, unlike any other state, own the
resources. We are an Owner State and we should act
like one.
1:13:07 PM
In 2012, I brought suit against the state for entering
into the Point Thomson settlement agreement which
violated the Alaska Constitution and Alaska Statutes.
I asked for no monetary damages, only that Alaska's
Constitution and Alaska laws be followed.
It's now 2015. Alaska has a new governor; a governor
who recognizes that settlement was illegal. It left
Alaskans out.
Here are but a few of the illegal acts set forth in
the settlements that are in clear violation of
Alaska's Constitution and Alaska law:
1. The Settlement attempts to contract around
the Department of Natural Resource's Regulatory
Authority in managing the Point Thomson Unit.
2. The Settlement attempts to alter the
regulatory Plan of Development process.
3. The settlement results in the abrogation of
the Commissioner of DNR's obligation to make
findings under 11.AAC.83.303, thus leaving the
method of field development up to the Working
Interest Owners.
4. The State agreed to stand down and not object
to any issues regarding the development of the
Point Thomson Unit brought before the Alaska Oil
and Gas Conservation Commission by the Working
Interest Owners.
5. The State agreed to an alternate method of
dispute resolution other than what is set forth
in Alaska statute.
That leads me to where we are today.
Since I have taken office, I have met with ExxonMobil
representatives numerous times; as recently as Monday.
My challenge to the Point Thomson settlement is not
about ExxonMobil. This lawsuit is not about stopping
the development of Point Thomson. It is about
following our Constitution and our laws in the
development of our natural resources.
My only goal is to increase production of oil and gas
from Point Thomson for the maximum benefit of
Alaskans.
However, as the Governor of this state, I must be
assured that people of Alaska are never again shut out
of the process.
On Friday, I will introduce legislation to strengthen
our statutes so that future settlement negotiations
related to the extraction of oil and gas on state land
shall not be used as an excuse to bypass our
Constitutional and legal obligations to citizens of
Alaska. As soon as I file this legislation, I will
file my motion to dismiss the Point Thomson
litigation.
All I did in bringing this lawsuit was to stand up for
Alaska. Someone had to.
Together, let's make sure future Administrations
cannot violate the Alaska Constitution and Alaska's
laws and bypass the public process in developing our
natural resources when settling litigation.
Together, let's ensure that Alaskans are never again
left out of the process to develop the natural
resources that belong to all of us on our land, let's
never again allow the public trust that we hold sacred
to be violated.
Never, ever again.
Thank you, Mr. Chairman.
1:16:23 PM
CO-CHAIR TALERICO thanked Governor Walker for coming before the
committee and stated that the governor had to leave immediately.
REPRESENTATIVE HAWKER expressed his disappointment with the
governor's departure and therefore the committee's resulting
inability to engage in a dialogue with him.
CO-CHAIR TALERICO agreed.
The committee took an at-ease from 1:17 p.m. to 1:18 p.m.
CO-CHAIR TALERICO inquired whether committee members had any
comments or questions they wished to place on the record.
1:18:20 PM
REPRESENTATIVE HAWKER said he thinks he heard the governor say
that he intends to dismiss the lawsuit and introduce legislation
in its place. Unknown to the committee is a definitive timeline
for that and whether the governor's dismissal of this lawsuit is
going to still allow the governor to pursue his claim in another
venue at the same time as the legislation. Absolute, definitive
statements were made that illegal acts were performed. Those
are alleged. Those were matters that had been taken before the
Alaska state superior court and the superior court in Alaska
reached very different conclusions than the governor has just
stipulated. The Alaska superior court determined that the
settlement was within the State of Alaska attorney general's
discretion. The Alaska superior court determined the settlement
was not an appealable decision of the Department of Natural
Resources. The superior court determined the appellant had to
challenge the legality of the settlement through an original
action, not an administrative question, and the governor is
questioning whether the superior court actually had the
jurisdiction to hear the appeal "and they believe they did not."
Representative Hawker said he had wanted the opportunity to
thank the governor for listening to the legislature's concerns
and following through with doing the right thing, which was to
remove this great cloud that exists over the development of
Point Thomson and entire Alaska North Slope natural gas
pipeline. He expressed disappointment that the committee does
not have the opportunity to ascertain that, in fact, the
governor will drop the suit, there will be no contingencies
attached to it, there will be an absolute and complete ability
of the North Slope natural gas pipeline project to move forward
without a cloud, and that the legislature along with the
governor will consider possible legislation to address the
concerns that Governor Walker originally raised in court and had
dismissed by the superior court of the state.
1:21:08 PM
REPRESENTATIVE JOSEPHSON, relative to the issue of conflict,
said nothing was raised in the presentation that there was
anything untoward. Rule 1.11(d) of the Alaska Rules of
Professional Conduct, would apply because there is frequently
movement between private and public sector attorneys and no
concerns were heard about that. There was some recognition on
the governor's part that what is at Point Thomson is not going
to be undone and that it is in the state's economic interest to
move forward. The governor said very clearly that he was going
to dismiss the action, or rather have his subordinates [do that]
using what is called the "Chinese wall" system, whereby the
governor has attorneys general handling the case for the state.
Presumably there is someone in Anchorage covering the side of
the plaintiff. The governor did not give any indication that he
was going to try another forum and re-litigate the matter.
Representative Josephson said he thinks the governor expects,
and that the committee will give, a fair hearing on the
governor's legislation to strengthen, apparently, the
requirements for a public process and review of a plan of
development. He said that is what he heard and it sounds to him
like a win-win.
1:22:47 PM
REPRESENTATIVE OLSON said he did not hear any mention of the
status of the attorney general in this whole thing and that is
the question he would have asked the governor.
CO-CHAIR TALERICO reiterated that the committee did ask the
Department of Law for a review and therefore he will be
consulting with Co-Chair Nageak about getting that review. He
offered his appreciation for the aforementioned comments, but
said he will not speculate what will happen this coming Friday
[2/13/15] because he is uncomfortable with speculating.
1:23:35 PM
REPRESENTATIVE HERRON asked whether it is Co-Chair Talerico's
intent to relay the committee's questions to the governor.
CO-CHAIR TALERICO replied he will certainly relay the questions.
REPRESENTATIVE HERRON asked that Co-Chair Talerico request a
copy of the governor's written document. He related that the
legislature has had briefings that Governor Walker would drop
the lawsuit if he got his stipulation. Representative Herron
requested clarification on whether Governor Walker received this
stipulation or if the alternative is to introduce legislation.
He said he has another question that he will personally bring to
Co-Chair Talerico.
The committee took an at-ease from 1:24 p.m. to 1:27 p.m.
HB 70-CREAMER'S FIELD REFUGE
1:27:10 PM
CO-CHAIR TALERICO announced that the next order of business is
HOUSE BILL NO. 70, "An Act adding land and water to the
Creamer's Field Migratory Waterfowl Refuge."
1:27:17 PM
REPRESENTATIVE ADAM WOOL, Alaska State Legislature, introduced
HB 70 as the sponsor. He explained that the bill would expand
the Creamer's Field Migratory Waterfowl Refuge in Fairbanks. He
spoke as follows:
This bill would add four state-owned parcels to the
refuge. These parcels were purchased with the
intention of being added to the refuge and are
currently being managed in accordance with the refuge
management plan. Passing this bill will formally
designate these as refuge lands and allow the [Alaska]
Department of Fish & Game to manage these lands as
part of the refuge. This bill will expand the refuge
from 1,776 acres to approximately 2,000 acres.
From the beginning Creamer's Field has been a public-
private partnership. When the … Creamer family
announced plans to sell the historic dairy, Fairbanks
community worked to raise funds to purchase and
preserve it and … Governor Hickel introduced
legislation for the state to purchase the historic
dairy site.
The Friends of Creamer's Field, a 501(c)(3) nonprofit,
works with [the Alaska Department of] Fish & Game to
provide educational and community activities at the
refuge, including Camp Habitat, which my two daughters
attend.
Thank you for considering this legislation and for
supporting a Fairbanks community landmark.
1:29:41 PM
REPRESENTATIVE HAWKER moved to adopt the proposed committee
substitute (CS), labeled 29-LS0372\H, Bullard, 2/9/15, as the
working document.
REPRESENTATIVE SEATON objected for discussion purposes.
1:30:08 PM
DAVID DUNSMORE, Staff, Representative Wool, explained that
Version H makes several technical changes that were suggested by
the Department of Natural Resources. [On page 1, line 8,] a
comma was inserted after "Beginning". [On page 1, line 10; page
2, line 4; page 2, line 9; and page 2, line 12,] the word
"continuing" is replaced with word "thence". The sponsor was
advised that even if those changes were not made, the legal
descriptions would still be accurate, but for drafting standards
for propriety, "thence" is the term that is properly used to
describe a boundary along a meander, and "continuing" is the
proper word to describe at along a line. [On page 3, lines 13-
18,] the legal description of the parcel described in paragraph
(6) was revised to a simpler version because it removes a
reference to a subdivision waiver by the Fairbanks North Star
Borough. This was suggested because reference to the waiver
might not be appropriate for statute because that waiver is not
a readily obtainable public document. He pointed out that the
sponsor has been assured [by DNR] that the legal descriptions
still accurately describe the land.
REPRESENTATIVE SEATON removed his objection to adoption of the
proposed CS.
1:31:54 PM
REPRESENTATIVE HERRON inquired how many people have reviewed the
land descriptions.
MR. DUNSMORE replied that someone from DNR or ADF&G could better
answer the question, but that to his knowledge at least five or
six people have looked at them.
1:32:24 PM
CO-CHAIR TALERICO ascertained there was no objection to adopting
Version H and ordered its adoption as the working document.
REPRESENTATIVE JOSEPHSON noted that the previous governor vetoed
this legislation [House Bill 246 passed and vetoed in 2014]. He
asked why it was vetoed and whether the issue had been resolved.
MR. DUNSMORE confirmed that [Governor Parnell] had vetoed the
bill. He explained that the governor's veto message expressed
support for the underlying intention of adding these lands to
the refuge but that a Department of Law review had found an
error in the legal description that could have potentially
caused a cloud on the title of the private landowner whose land
was inadvertently described. Out of caution and respect for the
private landowner who was unconnected to the bill in any way,
the bill was vetoed.
REPRESENTATIVE SEATON inquired whether any of the contiguous
landowners object to these lands being added to the refuge.
REPRESENTATIVE WOOL answered no.
1:34:10 PM
CO-CHAIR TALERICO opened public testimony on HB 70.
1:34:45 PM
MARK HALL, Land Surveyor, Division of Mining, Land and Water,
Department of Natural Resources, said he reviewed the [land]
descriptions. Responding to Representative Hawker, he said the
land descriptions in HB 70 are correct to the best of his
knowledge.
DAVID JAMES, Regional Supervisor, Division of Wildlife
Conservation, Alaska Department of Fish & Game, pointed out that
the property [being added to the refuge] is already owned by the
state. To the degree possible, he said, ADF&G has been managing
that property as part of the refuge although technically it is
not. Two different sources of federal funds were used to
purchase the land and it is part of the refuge's multiple use.
1:36:40 PM
CO-CHAIR TALERICO closed public testimony after ascertaining no
one else wished to testify.
1:37:07 PM
REPRESENTATIVE JOHNSON observed from the map in the committee
packet that some university land is within the [refuge] boundary
and some is not. He asked whether there are any use limitations
or restrictions on that land.
MR. DUNSMORE replied that his understanding is that use on the
adjacent university land is consistent. Drawing attention to
the map, he pointed out several trails that cross from the
refuge into the university land. He deferred further answer to
Mr. James.
MR. JAMES responded that he is unaware of any issues in regard
to conflicts or compromised uses on university land as opposed
to the refuge. As far as large holdings of university land that
might be used for other things in the future, he said that to
the best of his knowledge most of that is on the west side of
the refuge closest to the campus. As far as any issues with
other rights of way, he said he is unaware of any.
REPRESENTATIVE JOHNSON said he just wants to make sure it is a
compatible use to the university.
1:39:33 PM
REPRESENTATIVE HAWKER moved to report the proposed committee
substitute for HB 70, labeled 29-LS0372\H, Bullard, 2/9/15, out
of committee with individual recommendations and the
accompanying zero fiscal note. There being no objection, CSHB
70(RES) was reported from the House Resources Standing
Committee.
1:39:52 PM
ADJOURNMENT
There being no further business before the committee, the House
Resources Standing Committee meeting was adjourned at 1:40 p.m.