ALASKA STATE LEGISLATURE  SENATE RESOURCES STANDING COMMITTEE  February 17, 2021 3:32 p.m. MEMBERS PRESENT Senator Joshua Revak, Chair Senator Peter Micciche, Vice Chair Senator Click Bishop Senator Gary Stevens Senator Natasha von Imhof Senator Jesse Kiehl Senator Scott Kawasaki MEMBERS ABSENT  All members present OTHER LEGISLATORS PRESENT Representative Mike Cronk COMMITTEE CALENDAR  CONFIRMATION HEARING(S) Big Game Commercial Services Board Michael Flores - Soldotna Peter Buist - Fairbanks Aaron Bloomquist - Copper Center - CONFIRMATIONS ADVANCED Alaska Oil and Gas Conservation Commission Jeremy Price - Anchorage - CONFIRMATION ADVANCED WITNESS REGISTER MICHAEL FLORES, Appointee Big Game Commercial Services Board Department of Commerce, Community and Economic Development Soldotna, Alaska POSITION STATEMENT: Testified as appointee to the Big Game Commercial Services Board. PETER BUIST, Appointee Big Game Commercial Services Board Department of Commerce, Community and Economic Development Fairbanks, Alaska POSITION STATEMENT: Testified as appointee to the Big Game Commercial Services Board. AARON BLOOMQUIST, Appointee Big Game Commercial Services Board Department of Commerce, Community and Economic Development Copper Center, Alaska POSITION STATEMENT: Testified as appointee to the Big Game Commercial Services Board. WAYNE KUBAT, board member Alaska Professional Hunters Association Wasilla, Alaska POSITION STATEMENT: Testified in support of all appointees to the Big Game Commercial Services Board. JEREMY PRICE, Appointee Alaska Oil and Gas Conservation Commission Department of Commerce, Community and Economic Development Anchorage, Alaska POSITION STATEMENT: Testified as appointee to the Alaska Oil and Gas Conservation Commission. ACTION NARRATIVE 3:32:13 PM CHAIR JOSHUA REVAK called the Senate Resources Standing Committee meeting to order at 3:32 p.m. Present at the call to order were Senators Bishop, Stevens, Kiehl, Kawasaki, and Chair Revak. Senators Micciche and von Imhof joined the meeting shortly thereafter. CHAIR REVAK welcomed Representative Cronk to the committee meeting. ^CONFIRMATION HEARING(S) CONFIRMATION HEARING(S)  Big game Commercial Services Board  Alaska Oil and Gas Conservation Commission  3:33:08 PM CHAIR REVAK announced the consideration of Governor Appointees to the Big Game Commercial Services Board (BGCSB). CHAIR REVAK explained the function of BGCSB is to license and regulate the activities of providers of commercial services to big game hunters in the interest of the state's wildlife resources. He announced the first appointee for consideration is Michael Flores of Soldotna. Mr. Flores' initial appointment was to the license transporter seat on May 21, 2019 and his term expires on March 1, 2023. 3:34:09 PM MICHAEL FLORES, Appointee, Big Game Commercial Services Board, Department of Commerce, Community and Economic Development (DCCED), Soldotna, Alaska, explained he has been in Soldotna for 30 years, married, and has three children. He noted he owns three businesses: fishing chartersfishing and huntingone lodge, and a peony farm. He provided additional background information as follows: • Involved in fisheries for the last seven year with the North Pacific Fishery Management Council (NPFMC), and the Halibut Commission • Marine transporter for hunting on Kodiak Island for the last 19 years • Very passionate about hunting and that is what brought him to Alaska as a guide pilot where he guided and flew in the Bush, and afterwards worked for MarkAir • His businesses employ approximately 30 people, 6 or 7 are year-round • His businesses operate 10 boats in 5 locations on the Kenai Peninsula MR. FLORES said he is passionate about hunting and feels like serving on BGCSB is a good fit for him. CHAIR REVAK noted his children have military experience. MR. FLORES answered yes, two sons served in the U.S. Marine Corps (USMC) and one son continues to serve in the USMC. 3:36:13 PM CHAIR REVAK asked him to confirm that he has done a lot for wounded veterans by using some of his guiding services. MR. FLORES answered yes. He explained he works with the Military Warrior Support Foundation to take wounded military members out for a week of hunting on Kodiak Island. He said his intent is to try and get them engaged back in lifemany have not done anything since serving in Iraq or other stations. CHAIR REVAK thanked him for all that he does. He said his involvement [with wounded veterans] says a lot about his character. He asked him what have been his challenges thus far with BGCSB and what has been his approach to resolve those challenges. 3:37:34 PM MR. FLORES answered there are some ongoing issues for marine transporting, some people would like to just get rid of the whole transporting issue. He said transporting needs strengthening. He noted [BGCSB] has had discussions with the troopers and addressed some of the issues they are having. CHAIR REVAK announced the next Governor Appointee for consideration to BGCSA is Mr. Peter Buist; initially appointed to the public seat of BGCSB on May 21, 2019 with term expiration on March 1, 2021; reappointed and if confirmed his term extension expires March 1, 2025. 3:39:31 PM PETER BUIST, Appointee, Big Game Commercial Services Board, Department of Commerce, Community and Economic Development (DCCED), Fairbanks, Alaska, detailed his background information as follows: • Lived in Fairbanks for nearly 50 years • He has a couple of degrees o Biology from Syracuse o Environmental Resource Management from the State University of New York • Currently serving in a public seat on BGCSB • Retired Alaska master guide • Retired from a 30-year career with the Alaska Department of Natural Resources (DNR) o Worked as a land manager, forester, and wildland firefighter • Guided in Alaska for over 40 years • Served on "the old Guide Licensing and Control Board • Governor Cooper appointed to the Governor's Task Force on Guiding and Game in 1988 o Out of the task force the legislature established the first BGCSB • Governor Murkowski appointed him to the Alaska Board of Game in 2003 MR. BUIST said he would like to think he brings an interesting balance of knowledge and experience to BGCSB. Aside from his biology background, he understands and has worked in the guiding industry from many years, served on regulatory boards, worked at DNR, and is familiar with how land management agencies operate. 3:41:22 PM CHAIR REVAK noted he has a lot of experience. He asked him what has been his biggest challenges at BGCSB and how does he intend to deal with those. MR. BUIST answered his biggest challenge was catching up after a three-year hiatus following retirement and giving up his master guide license. He said there have been mostly regulatory and statutory changes, as well as changes in the way BGCSB currently operates. He noted virtually all the issues BGCSB deals with are challenging, but probably the most challenging one for the last year has been trying to test and query new guide applicants without being present in the same room. The testing process has been challenging, but BGCSB has done a pretty good job. He added that he has gone on to BGCSB thinking he has a lot of guide friends, but he ends up with more guide enemies than friends. SENATOR BISHOP thanked him for serving on the board and for putting himself up again [by extending his appointment]. He said his reputation and track record precedes him and he is glad he is serving on the board. 3:43:48 PM SENATOR KIEHL referenced his extensive resume and thanked him for all the work he has done over the years for the state. He pointed out BGCSB is a regulatory board, noting he previously talked about examining applicants. He remarked he knows Mr. Buist can hear complaints where some of that gets quasi- judicial. SENATOR KIEHL noted an individual raised a question to him about fairness and whether everybody can get an even shake and a fair hearing. He referenced some of the "public stuff" Mr. Buist posted online about "smarmy slobbering sycophants." He asked him how he can tellquoting him"slobbering orgasmic liberal"from the regular kind. MR. BUIST replied he has no idea what Senator Kiehl is talking about. He said he does use social media occasionally, but he is not sure if what Senator Kiehl is talking about has anything to do with BGCSA. He said since Senator Kiehl is talking out of context, he asked him for an explanation. SENATOR KIEHL explained somebody sent him some social media posts and they are concerned about character, the ability to hear people fairly, and to consider the issues fairly on the boardif that is a public approach. 3:45:37 PM MR. BUIST replied he still does not understand the possible connection to BGCSB. He explained when a person who is trying for a license comes before BGCSB, the board has specific things to test and query about. He said in all his years on the board, he cannot ever remember anyone asking if they were liberal or not. He remarked he sees what Senator Kiehl is trying to do, but he still does not think it has anything to do with BGCSB. CHAIR REVAK asked if anyone has ever accused him of acting biased during his long history of service. MR. BUIST asked if he meant biased about how he has performed on the board. CHAIR REVAK replied yes. MR. BUIST answered he does not think so. CHAIR REVAK asked if he feels biases will play a role in how he acts in his service on the board. MR. BUIST replied he does think it has and he does not think it will. 3:47:04 PM CHAIR REVAK thanked him for being willing to serve. CHAIR REVAK announced the next Governor Appointee for consideration to BGCSA is Aaron Bloomquist. He said Mr. Bloomquist's appointment will begin March 1, 2021 and expire March 1, 2025. 3:47:40 PM AARON BLOOMQUIST, Appointee, Big Game Commercial Services Board, Department of Commerce, Community and Economic Development (DCCED), Copper Center, Alaska, detailed his background information as follows: • He and his family lives in Palmer during the winter and spring, summer, and fall in Copper Center where he operates: o Alaska Outfitters Unlimited and Fishing Bug Charters: square4 Provides guided hunting for almost all of Alaska's big game species square4 Fishing charters in the Copper River drainage square4 Sightseeing tours for Princess Cruises. • His business has a hunting concession in: o The Arctic National Wildlife Refuge Wilderness o The Wrangell-St. Elias National Park and Preserve Wilderness • His business operates hunting services on Ahtna Native Corporation lands in the Copper River basin. MR. BLOOMQUIST said he really believes that everyone that uses wildlife resources in their professionsand otherwise for that mattershould give back as much as possible. He noted he has spent "tons of time" on committees, boards, and meetings. He stated like Mr. Flores, he also has a passion for getting veterans in the field. He noted he has hosted approximately 60 disabled veterans on hunting trips over the yearsabout half were severely disabled. MR. BLOOMQUIST added he has spent hundreds of hours a year working on wildlife issues in Alaska over the last couple decades. He said he has served on numerous boards and conservation organizations in state and federal sanctioned committees. He stated he believes everyone should participate in public service and is honored by his appointment to one of two licensed-guide representatives to BGCSB. 3:49:58 PM SENATOR STEVENS noted he has recused himself 2 or 3 times out of 200 votes. He asked when he has had to recuse himself. MR. BLOOMQUIST replied he may be looking at his application for the Board of Game. He said he is not sure he would ever have to recuse himself in the BGCSB setting because everything board members do relates to their profession. He noted he applied for an appointment to BGCSB or the Board of Game. SENATOR STEVENS said his question on recusal relates to the Board of Game. SENATOR MICCICHE noted he appreciates his resume addendum and his full transparency on an unfortunate shot, even though the application process does require the disclosure. 3:51:53 PM MR. BLOOMQUIST said those comments means a lot. He stated, "I guess we probably should all just be open with all of this stuff and there would be a lot less gotchas, probably." SENATOR MICCICHE remarked he must have had his bow draw weight at 90-plus pounds. MR. BLOOMQUIST replied his setting was only 70 pounds and it just happened to hit a certain part of the animal. SENATOR KIEHL noted he mentioned in his materials about some of the work he did trying to protect wild sheep from pathogens and his proposals to the Board of Game. He said he realizes his question references a different board, but he asked him about whether BGCSB is involved in anyway in some of the discussions about pack animals and protecting wild sheep populations, and how he would work on that. 3:53:05 PM MR. BLOOMQUIST noted he was one of the founding members of the Wild Sheep Foundation in Alaska. He said he knows BGCSB has commented in the past on the [micoplasmaovapnemonia] (MOV) issue getting into wild sheep. He remarked he is not sure MOV is a good fit to work on a lot, but he has worked and continues to work behind the scenes on the MOV issue and any other conservation issues. He said he thinks he drafted the proposal that brought MOV to the forefront with the Board of Game. MR. BLOOMQUIST admitted he has taken some heat over his MOV proposal because it was a bit of a hammer to get the discussion going, but that was his intent because the State has been sitting on the issue for 20 years or more. However, he is not as involved in MOV as he once was, the Wild Sheep Foundation has taken over working on MOV and there has been some progress. He said he is glad to see MOV has moved along, and he will do what he can to help with it. CHAIR REVAK thanked Mr. Bloomquist for being willing to serve. 3:55:19 PM CHAIR REVAK opened public testimony. 3:56:09 PM WAYNE KUBAT, board member, Alaska Professional Hunters Association, Wasilla, Alaska, testified in support of all appointees to the Big Game Commercial Services Board. He noted he is a 45-year Alaska resident and has lived in the Mat-Su Valley since 1984. He detailed he earned his registered guide license and started his own guiding business in 1986. He said he is serving his ninth year on the board of directors and currently serves as vice president for the Alaska Professional Hunters Association (APHA) and is speaking on their behalf. He detailed according to APHA's third McDowell Group report on Alaska's guided hunting industrycompleted January 2021and shared the following information: • 420 master and registered guides in 2019 o 250 contracted 1 or more hunts • Only master or registered guides can be professional members of APHA • APHA's professional membership is over 170 • Approximately two-thirds of all contracting Alaska guides are professional members of APHA • In addition to master and registered guides, there are 640 assistant guides for a total of 1,060 guides MR. KUBAT said BGCSB is critical to APHA's industry and the guides that they represent, the wildlife resource, and the Alaska public that they serve and help protect. He noted the importance of getting good candidates to serve on the board and APHA is very appreciative to Messrs. Flores, Buist, and Bloomquist. APHA supports all three appointees. He summarized BGCSB is important to guide business in Alaska, an industry that brought in $57.4 million new-dollars into Alaska, provided 1,890 jobs, and donated meat valued over $2 million most jobs and meat donations occurred in rural Alaska. 3:59:26 PM SENATOR BISHOP asked Mr. Kubat if he could provide the committee with his written testimony. MR. KUBAT answered yes. CHAIR REVAK thanked Mr. Kubat for providing his testimony. 4:00:10 PM CHAIR REVAK closed public testimony. 4:00:28 PM SENATOR MICCICHE moved that the following named appointees to the Big Game Commercial Services Board be forwarded to a joint session of the legislature for consideration: Big Game Commercial Services Board Michael Flores - Soldotna Peter Buist - Fairbanks Aaron Bloomquist - Copper Center 4:00:48 PM CHAIR REVAK announced seeing no objection, the motion passes. He read the following statement: In accordance with AS 39.05.080, a signature on this report does not reflect an intent by any of the members to vote for or against the confirmation of the individual(s) during any further sessions. 4:01:07 PM At ease 4:02:47 PM CHAIR REVAK called the committee back to order. He announced the consideration of a Governor Appointee to the Alaska Oil and Gas Conservation Commission (AOGCC). He said Commissioner Jeremy Price was initially appointed October 7, 2019 to March 1, 2021; if reappointed, his term would expire March 1, 2027. CHAIR REVAK explained the mission of AOGCC is to protect the public interest in exploration and development of Alaska's valuable oil, gas, and geothermal resources through the application of conservation practices designed to ensure greater ultimate recovery and the protection of health, safety, fresh groundwater, and the rights of all owners to recover their share of our resource. He said since Commissioner Price has been in his position since October 2019, he asked him to provide a brief personal history and spend more time sharing his experiences and accomplishments since joining the commission and what he intends for the future. 4:04:09 PM JEREMY PRICE, Appointee, Alaska Oil and Gas Conservation Commission, Department of Commerce, Community and Economic Development, Anchorage, Alaska, said in October 2019, [the governor] appointed him as the public commissioner and chairman of AOGCC. He said the past 15 months [at AOGCC] have been his most enjoyable of his career. He stated working with experienced and dedicated professionals has humbled him. He thanked the governor for his AOGCC reappointment. He said first and foremost, he is an Alaskan, born in Fairbanks and raised on a homestead in Salcha. He detailed his background as follows: • Undergraduate degree in business from Utah State University • Master's degree in government from John Hopkins University • Spent his career in public policy roles: o U.S. House of Representatives o U.S. Senate o American Petroleum Institute o Americans for Prosperity o Alaska Governor's Office MR. PRICE said he has spent his career working on solutions to problems facing Alaskans and has always enjoyed representing Alaskans and advocating on their behalf. However, out of any issue he has worked on, oil and gas has been the most enjoyable and the most interesting and rewarding to him. Over the past 15 months he has taken a very serious and dedicated role [with AOGCC] and has tried to represent the public as best as he can. MR. PRICE stated during his short time with AOGCC, he has been instrumental in helping the commission transition to a digital application system. Until last year, the commission only accepted paper applications for permits to drill, geological surveys submissions, well data, well workover sundries, and underground injection applications. All previous applications and data submissions were in paper formusually in duplicate. However, with COVID-19 pushing the commission to change to a safer and more efficient process, the commission fully transitioned to digital which increased AOGCC's efficiency and reduced operator cost. He said the longstanding goal of AOGCC is to process permits to drill within 10 working days. Prior to the conversion to electronic applications, the processing percentage of permits to drill within 10 days was around 64 percent. After the switch to electronic applications, the commission increased its 10-day processing percentage to 80 percent. 4:06:26 PM MR. PRICE noted a year ago, AOGCC expected one of the most active drilling seasons in years. Unfortunately, the oil and gas industry scaled back their drilling plans due to economic factors related to COVID-19, resulting in a 53-percent drop in drilling permits in 2020 compared to 2019. Well interventions only declined by about 8 percent and a big reason for that is Hilcorp staying active throughout the downturn by consistently and frequently repairing broken wells. He explained other big top-line items that AOGCC tracks, oil production was down in 2020 by about 4 percent or 7 million barrels compared to 2019primarily due to production cut over the summer and into the fall. Regarding enforcement and compliancedespite COVID-19 challengesAOGCC inspectors still managed to perform nearly 6,000 inspections and witnessed tests, which is slightly above the annual average over the last 10 years. However, AOGCC expects activity to stay flat in 2021. MR. PRICE said regarding regulator changes, AOGCC just finalized a change to its bonding regulation that provides more time for operators to meet the new bonding amounts. Thus far, two operators have sued over those bonding amounts that went into effect in 2019the Department of Law is handling those cases. However, the AOGCC regulation provided greater time for operator compliance with the new bonding amounts from four years to seven years, and the commission adjusted the amounts to provide a smoother transition as an operator increases its wells. MR. PRICE noted AOGCC is trying to better understand any risks associated with production wells without underground and mechanical integrity testing since well completion. AOGCC is working with operators to better understand the available mechanical integrity test data. The commission's concern is with well casing integrity due to subsidence, erosion, and corrosion especially with older gas-lift wells. The commission is also working with operators to proactively address idle wells shut for long periods of time to avoid "orphan wells." He summarized he is profoundly grateful and humbled by his opportunity and responsibility with AOGCC. He said he is passionate about Alaska, his desire to serve Alaskans, and the rights of Alaskans to responsibility develop their resources for the benefit of the people. 4:09:20 PM SENATOR KAWASAKI thanked him for serving on AOGCC for the last year. He asked him whether he filled out the Boards and Commissions application to become a commissioner. MR. PRICE answered that he will check with Boards and Commissions to verify if he missed filling out the form. SENATOR KAWASAKI noted all the other commissioners filled out a form via Boards and Commissions. He said the form certifies an applicant's information as true, accurate, and complete. MR. PRICE apologized for his oversite and will follow up with the committee. CHAIR REVAK asked Mr. Price to provide the form to his office for distribution to committee members. 4:10:42 PM SENATOR KAWASAKI noted he worked about eight years for U.S. Senator Murkowski and Congressman Young in Washington, D.C.; a year at the [American Petroleum Institute], and now seeks [legislative confirmation] to serve as the public member on the AOGCC. He asked him what kind of unique experiences does he bring to the jobother than the two other commissionersat AOGCC. MR. PRICE answered the role of the public commissioner should have an understandingby statuteof the oil and gas industry. He said his experience for working on oil and gas issues is in terms of public policy throughout his time in Washington, D.C. He noted in Alaska he worked on energy issues with Americans for Prosperity and frequently testified in support of various decisions by the federal government when lands were opened to resource developmentthe [National Petroleum Reserve in Alaska] (NRA), [Arctic National Wildlife Refuge] (ANWR), or other things. He stated as far as his experience in oil field practices technology, it was a new level of education he had not gone through and the learning curve was steep. However, AOGCC staff fortunately brought him up to speed and the process has been exciting, but his experience has been more oil and gas policy at a higher level versus the oil field itself. 4:12:20 PM SENATOR KAWASAKI noted he received letters of support from his fellow AOGCC commissionersboth have a lot of experience on an engineering leveland his presence on the commission is good. He pointed out he served as the deputy chief of staff at the beginning of the Dunleavy administration, and he did not serve very long. He asked him why he stepped down. MR. PRICE answered that he stepped down strictly for the AOGCC opportunity. He said he is a big fan of the governor and was lucky and fortunate to spend some time with him and in that role working with agency commissioners. He noted prior to the governor's election, he was interested in the AOGCC role. The former chief of staff for the governorthe individual who hired himheld the AOGCC position many years ago and that was something he talked to him about. MR. PRICE said he did not expect the AOGCC position to open as soon as it did, but if the position had not opened, he would not have left. 4:13:50 PM SENATOR BISHOP asked if he could enlighten the committee on the legacy wellsabandoned wellsin the NPRA. MR. PRICE replied AOGCC had a good last season, the commission works mostly with the Bureau of Land Management (BLM) in taking care of NPRA legacy wells. AOGCC's engineering staff reviews legacy well plans, and the commission tries to ensure the proper plugging and abandonment of the wells. AOGCC can provide additional information on the wells completed last summer and the amount of many wells. Every season the commission removes approximately a half dozen wells off its list. He noted there is federal legislationpassed by the U.S. House last yearthat might be of assistance. There is big interest amongst states, the Interstate Oil and Gas Compact Commission, and Congress in taking care of "orphan wells" in various parts of the countrywhere drilling started in the mid-1800s, so there are a lot of wells. Pennsylvania has thousands of wells that need plugging, so there could be a national effort that Alaska might be able to dovetail on. SENATOR BISHOP thanked him and noted he would talk to the chairman about a further update. 4:15:43 PM SENATOR MICCICHE asked him if he has any conflicts of interests either personal, financial, or under the Ethics Act. MR. PRICE answered no. SENATOR MICCICHE asked if he has been convicted of a misdemeanor within the past 5 years or a felony within the past 10 years. MR. PRICE answered he has never been convicted of misdemeanor or felony in his life. SENATOR MICCICHE noted the other form [that Senator Kawasaki addressed] is a certification of accuracy and completeness. He asked him if he certifies the accuracy and completeness of his comments as well as the resume that he provided for the committee today. MR. PRICE answered yes. 4:16:59 PM CHAIR REVAK noted the federal administration's agenda related to oil and gas and asked him what challenges does he see in the coming years. MR. PRICE answered there are a number of challenges, some pertain more to DNR jurisdiction, but AOGCC will feel its impact via drilling activity based on how policies shakeout with the federal government and the courts. Alaska only has so much control when so much is federally managed, so that is a concern. He noted hearing talk about hydraulic fracturing bans and related topics, but he is not concerned with that. The prior administration tried a similar ban, but a federal district judge in Wyoming struck that down. However, there are other ways to impede development. Locally, AOGCC wants to be vigilant on ensuring operators operate safely, protecting the public, and protecting the environment. MR. PRICE said he will make sure AOGCC gets as many inspections as possible of the safety valve systemsthe blowout preventers and that the industry does its practices in a safe mannerthat is always a priority. AOGCC will try to be as fair as possible when adjudicating decisions in a way that Alaskans want the commission to do it; that is where he sees his role in trying to represent the public in the best way he knows how when the commission faces a policy call. He noted as oil fields decline and leases change hands to smaller operators with shallower pockets, the commission wants to make sure no one cuts corners, things continue in a safe and responsible manner, and plugged wells no longer have an economic use. MR. PRICE said there are a lot of challenges ahead and the aforementioned challenges are just a few of them. CHAIR REVAK stated he looked forward to speaking with him more in the future. 4:20:46 PM CHAIR REVAK opened public testimony; finding none, he closed public testimony. 4:21:14 PM At ease 4:21:59 PM CHAIR REVAK called the committee back to order. 4:22:08 PM SENATOR MICCICHE moved that the following named appointee to the Alaska Oil and Gas Conservation Commission be forwarded to a joint session of the legislature for consideration: Alaska Oil and Gas Conservation Commission Jeremy Price - Anchorage 4:22:20 PM CHAIR REVAK said without objection the motion passes. He read the following statement: In accordance with AS 39.05.080, a signature on this report does not reflect an intent by any of the members to vote for or against the confirmation of the individual(s) during any further sessions. 4:23:08 PM There being no further business to come before the committee, Chair Revak adjourned the Senate Resources Standing Committee meeting at 4:23 p.m.