SSHB 364: "An Act establishing a moratorium on the issuance of state shallow natural gas leases in the vicinity of Kachemak Bay, and precluding the commissioner of natural resources from reissuing or otherwise extending leases within the moratorium area if the leases fail to produce gas in paying quantities within the terms of the lease or if there is a breach of a term or condition of the lease; and providing for an effective date."
00 SPONSOR SUBSTITUTE FOR HOUSE BILL NO. 364 01 "An Act establishing a moratorium on the issuance of state shallow natural gas leases in 02 the vicinity of Kachemak Bay, and precluding the commissioner of natural resources 03 from reissuing or otherwise extending leases within the moratorium area if the leases fail 04 to produce gas in paying quantities within the terms of the lease or if there is a breach of 05 a term or condition of the lease; and providing for an effective date." 06 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 07 * Section 1. LEGISLATIVE FINDINGS. The legislature finds that 08 (1) the land and water within the Kenai Peninsula Borough east of Cook Inlet 09 and south of the north boundary of Township 5 North, Seward Meridian, 10 (A) is immediately adjacent to the Cook Inlet Areawide Lease Sale and 11 the associated conventional gas projects; 12 (B) follows the same geologic trend supporting conventional gas 13 projects within the Cook Inlet Areawide Lease Sale;
01 (C) demonstrates geology, geography, economics, and demographics 02 consistent with the area and communities found in the Cook Inlet Areawide Lease 03 Sale; and 04 (D) is inconsistent with the rural and isolated communities described in 05 the intent of the shallow natural gas program; 06 (2) it is in the best interest of the state to lease mineral rights through a public 07 process, with administrative oversight and management, preparation of a best interest finding, 08 and a competitive bid process; and 09 (3) issuance of shallow natural gas leases with specific limitations on depths in 10 areas where conventional natural gas reserves may be present creates management problems 11 that may preclude the full unitization and conservation of the resources. 12 * Sec. 2. AS 38.05.177(a) is amended to read: 13 (a) The provisions of this section 14 (1) apply to gas, whether methane associated with and derived from 15 coal deposits or otherwise, from a field if a part of the field is within 3,000 feet of the 16 surface; and 17 (2) do not apply to authorize lease of 18 (A) land 19 (i) that is subject to an oil and gas exploration license or 20 lease issued under AS 38.05.131 - 38.05.134; or 21 (ii) that is leased under AS 38.05.180; 22 (B) the land (i) that is proposed to be subject to an oil and gas 23 exploration license or lease issued under AS 38.05.131 - 38.05.134; or (ii) that 24 is described in and part of a proposed oil and gas leasing program prepared 25 under AS 38.05.180(b); however, the commissioner may waive the limitations 26 of this subparagraph; 27 (C) the land that is held under a coal lease entered into under 28 AS 38.05.150, unless the applicant for a shallow natural gas lease is also the 29 lessee under AS 38.05.150 of that land; [OR] 30 (D) the valid existing selections of the Alaska Mental Health 31 Trust Authority made for the purpose of reconstituting the mental health trust
01 established under the Alaska Mental Health Enabling Act, P.L. 84-830, 70 02 Stat. 709 (1956), that become subject to management under AS 38.05.801, or 03 of land that has been designated by law for or is subject to designation for 04 conveyance to the Alaska Mental Health Trust Authority; however, after 05 consultation with the Alaska Mental Health Trust Authority, the commissioner 06 may waive the limitations of this subparagraph; or 07 (E) land and water within the Kenai Peninsula Borough 08 east of Cook Inlet and south of the north boundary of Township 5 South, 09 Seward Meridian. 10 * Sec. 3. The uncodified law of the State of Alaska is amended by adding a new section to 11 read: 12 APPLICATION OF SECTION 2 TO LAND CURRENTLY LEASED IN THE 13 VICINITY OF KACHEMAK BAY FOR SHALLOW NATURAL GAS EXPLORATION 14 AND DEVELOPMENT. The provisions of AS 38.05.177(a)(2)(E), added by sec. 2 of this 15 Act, apply to prohibit the issuance or reissuance of a lease under AS 38.05.177 entered into 16 before the effective date of this Act if the lease terminates because of the failure to extend the 17 lease under AS 38.05.177(d) or if the lease terminates by the operation of AS 38.05.177(h). 18 * Sec. 4. This Act takes effect immediately under AS 01.10.070(c).