Legislature(1995 - 1996)
01/30/1995 08:02 AM RES
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
HRES - 01/30/95 Number 210 HJR 13 - ENDORSING ANWR LEASING REPRESENTATIVE MIKE NAVARRE, PRIME SPONSOR, HJR 13, stated HJR 13 is something which he and many Alaskans have been interested in for a very long time. He said at no time in the state's history, and probably never again, will the state have such a powerful contingent at the federal level as the state does now and the opportunity for having this legislation pushed through at the national level is as good as it has ever been. REPRESENTATIVE NAVARRE stated the Arctic National Wildlife Refuge (ANWR) holds the highest potential in the United States and the entire North American continent for commercially producible oil discovery. He said in terms of potential, it is almost a sure thing in the oil industry. He noted there was a one in five chance and that has been upgraded even more. REPRESENTATIVE NAVARRE pointed out that oil is being imported for more than half of the oil use in the United States, the trade deficit continues to grow, domestic oil production is declining and at the national level, the economy, even though it is improving, could use the type of boost that the entire 50 states would get from the type of development that would take place in ANWR, if there were commercial discoveries available. REPRESENTATIVE NAVARRE said Alaska has proven in all of its oil production, the ability to execute production in an environmentally sound way. He pointed out that oil production on the North Slope, is state of the art production. He stressed that combined with the advances in directional drilling and the fact that most of the exploration wells would be built off ice pads, and ice roads would be used in the middle of winter, the impact would be very small. In addition, after the exploration wells delineate the field, there will be the ability to map out the easiest way to put production wells in place, assuring the smallest minimal impact to the environment. He felt a minimal impact will bode well at the national level, that the development of ANWR can be done right, and there is the ability to convince the U.S. Congress and the people of the United States of that fact. REPRESENTATIVE NAVARRE noted the development of ANWR, according to several statewide polls, is popular with the vast majority of Alaskans. He urged committee members to pass HJR 13. Number 280 CO-CHAIRMAN GREEN mentioned that HJR 13 is a bipartisan resolution and pointed out that both sides of the majorities are in favor of the resolution. He urged committee members to look at the two maps contained in committee member folders. He said there is a consistent misunderstanding in the public arena and some of the legislative offices as to the size of the area being discussed. He explained the area being discussed is the 1002 area, which is a very small amount of the total ANWR. He stated this proposal is to merely allow the industry to look at what might be there and reiterated there is a great potential for discovery. CO-CHAIRMAN GREEN said the biggest question confronting the industry is the fact there have been several wells drilled in the perimeter around ANWR that have found hydrocarbons, but not in economic quantities. He felt the major concern is whether or not there is enough oil there worth fighting about. He stressed there is a need to determine whether or not oil is present and if there is, what is going to be best for both the state and the nation. He pointed out to committee members that there are a couple of Congressional white papers in their packets, as well as newspaper clippings and letters of support. Number 315 REPRESENTATIVE PETE KOTT made a MOTION to MOVE CSHJR 13 (O&G) out of committee with individual recommendations. REPRESENTATIVE IRENE NICHOLIA clarified the area being discussed is very small. CO-CHAIRMAN GREEN responded that is correct. REPRESENTATIVE NAVARRE said the 1002 area was set aside originally by Congress to enable them to go back and take another look at the area and determine what the disposition of that land should be. REPRESENTATIVE KOTT WITHDREW his MOTION due to the fact that several people were present to testify on the resolution. REPRESENTATIVE NICHOLIA asked if there were any members present from the Oil and Gas Committee. She wondered why the reference to porcupine caribou was taken out of the original resolution. Number 340 REPRESENTATIVE NORMAN ROKEBERG responded the committee substitute was a total redraft. The specific references to the porcupine caribou herds were removed because it was the feeling of the committee that the elimination of that reference would help the delegation in Washington move the legislation through Congress. He reminded everyone HJR 13 is to assist the state's Congressional delegation. REPRESENTATIVE NICHOLIA felt the President would feel better about a resolution containing language which recognizes animals important to the people who live in the area, as well as any Canadians who might also have an interest. REPRESENTATIVE ROKEBERG replied there is no denying the importance of the porcupine caribou herd. He said the intent of the resolution is to assist the state's Congressional delegation, not throw up red flags and signals which may generate some negativity. REPRESENTATIVE NICHOLIA clarified the intent is to barrel the resolution through at all costs and not protect the people or the caribou herd. REPRESENTATIVE BILL WILLIAMS noted that the chairman of the Oil and Gas Committee kept in close contact with Alaska's Congressional delegation and asked for their assistance. He said the committee felt the last FURTHER RESOLVED would address Representative Nicholia's concern. He added that Representative MacLean had indicated that there were safeguards in place with the borough in regard to the issue. Number 380 REPRESENTATIVE ROKEBERG stated the wildlife director of the North Slope Borough testified at the Oil and Gas Committee hearings and spoke specifically about the wildlife and other areas of environmental concerns on the North Slope. He said both the mayor and the head of the wildlife protection portion of the borough supported the committee substitute. He pointed out there are three references within the committee substitute to acting in an environmentally sound manner in terms of any development and further exploration. The Oil and Gas Committee felt that was adequate for the purposes of the resolution. REPRESENTATIVE NAVARRE noted the Oil and Gas committee also felt that the value of the porcupine caribou herd had already been recognized through a number of studies conducted. He felt that whether or not there was a line in the resolution, the caribou would be recognized and identified as something very important and something that will be addressed in any plan to explore or develop ANWR. He noted that the exploration stage would be done in the middle of winter, mostly off of ice pads and roads, and the impact would be very minimal. He explained it would first be determined whether or not there is commercially developable oil there and then it would be determined how best to lay out the production plans so there is minimal impact to what is recognized by Congress and others as something very important to the people and environment on the North Slope. REPRESENTATIVE SCOTT OGAN added that when the state was looking at developing Prudhoe Bay, there were legitimate concerns about the effect of that development on the caribou herds. Now, the success of that area can be recognized. He said the caribou herd there has increased sixfold since that development. He noted the state now has a track record for oil development on the North Slope and felt the oil companies have been very conscientious about environmental protection. He stressed some of the environmental technology developed on the North Slope has been exported to other areas of the world. REPRESENTATIVE NICHOLIA stressed there is always another side to the story, especially from the people who live there. She has talked to people living in the area and they have noticed a change. Number 440 DAVID VAN DEN BERG, REPRESENTATIVE, NORTHERN ALASKA ENVIRONMENTAL CENTER (NAEC), testified via teleconference, and stated NAEC opposes HJR 13. He said it was refreshing to see the cooperation between the various legislators on this issue and he understands the political necessity for elected individuals to support oil companies, even in the most sensitive areas in Alaska. He stated he also understands the economic realities facing the state. MR. VAN DEN BERG wondered why this resolution is being considered, particularly as currently worded. He felt it was within the power of the legislature to stipulate things at the outset which would benefit the state most. He noted that conspicuously absent in the resolution is the mentioning of a 90/10 royalty split for the state. He felt a similar resolution directed at ARCO Alaska regarding (indiscernible) field would yield a better return for the state. MR. VAN DEN BERG said while the Coastal Plain is only eight percent of the total ANWR, that Coastal Plain is the most biologically productive area in the entire ANWR. The Coastal Plain is the destination of polar bears, migrating porcupine caribou herd, waterfowl and (indiscernible) from all over the world. He stressed the estimated 5,000 -7,000 acre footprint in the resolution is not a postage stamp but a potential web of industrial facilities which will crisscross and dissect the Coastal Plain, interrupting animal (indiscernible) coastal plain. MR. VAN DEN BERG reminded committee members that in regard to Prudhoe Bay, while the footprint is far less than the overall industrial development there, it spans some 580 square miles. He said if the results from Prudhoe Bay prove anything, it proves those things about Prudhoe Bay only. The l002 area is a totally different area because of its proximity to the mountains, because of the size of the herd that goes there, and because there are musk oxen populations living there throughout the year. He felt the lessons from Prudhoe Bay are only guidelines, not a guarantee of coexistence. Number 507 MR. VAN DEN BERG said on the one hand the committee is pleading to open the Coastal Plain, yet on the other hand the committee is (indiscernible) the export ban. He felt of the two issues, the export ban has a better chance of being lifted. That would mean if oil is found and produced on the Coastal Plain, it would be exported to the highest bidder which would probably be overseas. He said there is language in the resolution which he recommends be changed. Number 530 SARA HANNAN, REPRESENTATIVE, ALASKA ENVIRONMENTAL LOBBY (AEL), said AEL represents over 9,000 Alaskans. She stated the ANWR was set aside originally in 1969 partly because of its unique biological habitat. References to the science which has developed in the past twenty years has let us know that what was known in 1969 is a very limited scope of the science available today. She said populations of caribou are higher in total count and part of that has to do with the fact that caribou are cyclical animals, their populations vary, and it is not known if those are 20 year cycles, 50 year cycles, 100 year cycles or longer. Therefore, extrapolating from a small window of science and saying that today caribou populations are much higher than they were 20 years ago does not give the complete conclusion about the health of the population. MS. HANNAN stated the ANWR Coastal Plain is a small percentage of the entire North Coastal Plain of Alaska. Less than eight percent of the Coastal Plain of the Arctic Coast is set aside from development of oil. Ninety percent of Alaska's Coastal Plain is currently open and available for exploration and drilling. She said a small area, the 1002 area in ANWR, is being debated. The debate has raged because of the area's uniqueness not because oil is not present. She stressed the reason the debate is ongoing is because everyone believes there is oil there. She pointed out that the most optimistic predictions say there might be 3.2 billion barrels of recoverable oil. She noted that amount is only one- third of the energy consumed in the U.S. on an annual basis. MS. HANNAN felt opening up the ANWR for oil exploration is not going to change the country's pattern of consumption and it is not going to stabilize the economy of Alaska. The potential for biologic disaster is present there. She said perception is a substantial part of reality. She stated the original version of HJR 13 acknowledged that the strictest standards in environmental quality could be protected by technology available today and urged the use of that technology. The Oil and Gas Committee eliminated that language. She felt if the committee will not articulate in the resolution that they are willing to adhere to the strictest standards and best technology available, why do they think companies would do it. MS. HANNAN said the original version of HJR 13 acknowledged that for centuries the Gwich'in people have been dependent on a population herd which limited science is available on and encouraged Congress to protect the Gwich'in people's use of it. The Oil and Gas Committee eliminated that language. She stated perception is nine-tenths of reality. By eliminating that language, the committee is not acknowledging those people have concerns and their concerns will be listened to. She urged committee members not to pass the original version of HJR 13 nor the committee substitute. Number 651 BEVERLY WARD, REPRESENTATIVE, ARCO ALASKA, stated ARCO Alaska supports CSHJR 13 (O&G). She said ARCO has been an operator of the Prudhoe Bay and Kuparuk oil fields since their initiation. Their experience in operating Arctic oil fields has given them a thorough understanding of the local environmental requirements and has convinced them that the Coastal Plain can be explored and developed without causing harm to the health and viability of the Refuge ecosystem. MS. WARD pointed out that ARCO's technologies have advanced significantly since they pioneered the design and operation of oil development in the Arctic. Using today's technology, ARCO's presence is compatible with local fish, wildlife, and their habitats. She said the existence of productive and abundant populations of birds, caribou, and fish throughout all North Slope oil fields is evidence of ARCO's ability to be good neighbors with all current land users. MS. WARD stressed that ARCO envisions technologies of the future being even more advanced, further reducing their footprint, while maximizing the benefits of continued resource development to the state, the state's citizens, and to the nation. These benefits range from the creation of exploration and development jobs for Alaskans, to additional state tax revenues, to manufacturing jobs in other states and national security issues. She pointed out that opening ANWR will benefit not only Alaska, but the entire U.S. ARCO believes it is time to move forward with exploring the most potentially productive area in Alaska. She said ARCO supports and encourages the committee to pass CSHJR 13 (O&G). REPRESENTATIVE OGAN said there has been concern expressed about verbiage in the original resolution being eliminated regarding the provision of strict standards for protection of land, water, and wildlife resources. He wondered who ARCO would be accountable to in regard to making environmental impact studies and the oversight involved. TAPE 95-5, SIDE B Number 000 MS. WARD responded there will not be any less of a standard at ANWR than there is at Prudhoe Bay. She said ARCO has all of the federal and state laws to comply with and with all that ARCO has learned, they expect their imprint in ANWR to be much smaller. She noted she would be happy to provide a list of all the different laws and agencies which ARCO would deal with. REPRESENTATIVE OGAN wondered if the specific verbiage is left out, would there be any less oversight by any agencies. MS. WARD said leaving the statement out of the resolution does not change any law or regulation but rather, it is a statement of intent by this legislature. CO-CHAIRMAN GREEN noted ARCO is being referred to in connection with ANWR and he reminded everyone that ANWR would be opened to the industry, not a particular company. REPRESENTATIVE AUSTERMAN wondered if the 90 percent mentioned in the original version is an automatic given. CO-CHAIRMAN GREEN said yes. He stated that was part of the original Alaska Statehood Act. He pointed out, however, the federal government is now trying to renege, saying they want to do something less than 90/10. If the Statehood Act is followed, it would be a 90/10 split in favor of the state not the federal government. REPRESENTATIVE AUSTERMAN wondered why the 90 percent verbiage was removed from the original resolution. REPRESENTATIVE ROKEBERG responded the removal of the reference to the royalty split was a result of a request from the Congressional delegation in Washington. Both Congressman Young and the offices of Senators Murkowski and Stevens indicated that reference to that language would not be helpful because it is a controversial aspect. He said there has been discussion among committee members and testimony received recommending that the 90/10 royalty issue be taken up under a separate resolution to avoid clouding the issue. Number 059 GEORGE YASKA, DIRECTOR OF WILDLIFE, TANANA CHIEFS CONFERENCE (TCC), testified via teleconference and stated TCC is opposed to HJR 13 and the committee substitute. He said the reason for their opposition is due to their concern about the safety and productivity of the porcupine caribou herd. He noted there are no references to the porcupine caribou herd in the committee substitute. The closest language he could find referring to the porcupine caribou herd was "environmental safeguards" and he felt that language was not strong enough. MR. YASKA told committee members that the porcupine caribou herd numbers between 150,000 and 180,000 caribou. The caribou calve within the 1002 area of ANWR and calve principally within the same area where the oil will probably be found. He pointed out that the National Biological Service has been conducting research for eight years and their field report will be completed in June. An early draft of the report indicates a potential significant negative impact to the herd. He stressed the people in the area depend heavily on the porcupine caribou herd. He indicated that is the reason TCC opposes CSHJR 13 (O&G) and HJR 13. REPRESENTATIVE RAMONA BARNES clarified the caribou herd on the North Slope has increased since Prudhoe Bay, especially those caribou that wander along the pipeline. MR. YASKA responded that Representative Barnes was referring to the Central Arctic caribou herd which exists near the Prudhoe Bay reserve. He explained there are two principal differences between the porcupine caribou herd and the Central Arctic caribou herd. First, the Prudhoe Bay field does not lie in the calving area of the Central Arctic herd and the caribou primarily seen at Prudhoe Bay are male caribou. REPRESENTATIVE BARNES clarified a very small footprint will be used for drilling purposes. MR. YASKA replied that is correct. However, that footprint is the same size as the core calving ground for the caribou herd. He said scientists have shown that the caribou would probably have to move and all indications are that during calving, pre-calving, and post- calving, caribou are very skittish and very leery of human activity. He felt they would be especially leery of the heavy industrial activity such as what would be found in ANWR for exploration and drilling. CO-CHAIRMAN GREEN asked Mr. Yaska if he had visited the Kuparuk oil field. MR. YASKA stated he had been at Prudhoe Bay, but not Kuparuk. CO-CHAIRMAN GREEN suggested he try and be there during the migratory cycle. He said while Prudhoe Bay does not lie within the normal course of the calving cycle, the Kuparuk River does and he felt it would be worthwhile to see the extent to which the industry has gone to assist the caribou. He noted the caribou in that area are far from skittish and added that the caribou have the right of way. He stressed it is improper and subject to dismissal for anyone to harass caribou if they cross the roads. He added that when the caribou are calving, they are oblivious to anything around them. Number 128 REPRESENTATIVE NICHOLIA asked Mr. Yaska if he had mentioned that the caribou herd does not always take the same path when migrating. She said it will not be known whether or not the caribou will be going into the 1002 area because they change their route so often. CO-CHAIRMAN GREEN assured Representative Nicholia that fact had been mentioned. REPRESENTATIVE KOTT acknowledged the comments made by Ms. Hannan. He felt many of her comments were very relevant. He noted that she has her constituency, and legislators have theirs. He mentioned he represents over 15,000 people in a very condensed area who are in favor of opening ANWR. He felt that was indicative of acknowledging that the oil companies in the past have been very responsible in oil exploration and production. If that were not the case, he said he would probably have concerns about opening ANWR and perhaps would not support the resolution. He stressed he has been in the area, understands what is going on there and therefore, supports the legislation. REPRESENTATIVE KOTT made a MOTION to MOVE CSHJR 13 (O&G) out of committee with accompanying zero fiscal note with INDIVIDUAL RECOMMENDATIONS. REPRESENTATIVE NICHOLIA OBJECTED. CO-CHAIRMAN GREEN asked for a roll call vote. Voting in favor of CSHJR 13 (O&G) were Representatives Kott, Austerman, Williams, Ogan, Barnes, and Green. Voting against the motion was Representative Nicholia. The MOTION PASSED 6-1.