Legislature(1995 - 1996)

01/30/1995 08:02 AM RES

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
 HRES - 01/30/95                                                               
 Number 210                                                                    
 HJR 13 - ENDORSING ANWR LEASING                                             
 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               
 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                                                                    
 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           
 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              
 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            
 Number 530                                                                    
 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                                                                    
 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                
 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            
 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                  
 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                                                                    
 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           
 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           
 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                  
 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.                              

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