Legislature(2015 - 2016)BARNES 124
02/27/2015 01:00 PM House RESOURCES
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
HJR 4-OFFSHORE OIL & GAS REVENUE SHARING 1:04:59 PM CO-CHAIR TALERICO announced that the first order of business is HOUSE JOINT RESOLUTION NO. 4, Urging the United States Congress to provide a means for consistently and equitably sharing with all oil and gas producing states adjacent to federal outer continental shelf areas a portion of revenue generated from oil and gas development on the outer continental shelf to ensure that those states develop necessary infrastructure to support outer continental shelf development and preserve environmental integrity. 1:05:12 PM REPRESENTATIVE DAN SADDLER, Alaska State Legislature, as the sponsor, introduced HJR 4. He said HJR 4 calls on the federal government to enact a fair and sensible system of federal revenue sharing from the outer continental shelf (OCS). Oil and gas development in federal areas can be a boon for the federal government in terms of jobs, revenue, and a secure source of domestic energy, but it also creates costly impacts on the states bordering that development. The government recognizes these strains and in some states it shares the proceeds to help the states offset the costs of the improvements and services necessary for safe, responsible development. In onshore areas the federal government shares 50 percent of the revenue with the state in which that production occurs. In states within three miles of near shore, the federal government shares 27 percent of the revenue. In four states bordering the Gulf of Mexico the federal government shares 37.5 percent. However, under current federal law, the State of Alaska would receive 0 percent share of any federal revenues from oil produced in the Chukchi and Beaufort seas or other OCS areas. Industry, the federal government, and the State of Alaska know that the federal waters off the North Slope hold tremendous amounts of oil. Recent environmental impact statements for Shell Oil's efforts in that region indicate that over three billion barrels of oil are likely to be produced. But just as onshore development in the North Slope required investments in infrastructure, development of Alaska's offshore resources of oil and gas will also require investments. Investments will need to be made in infrastructure like roads, ports, airports, utilities, and housing, as well as in services including public safety, search and rescue, oil spill response, and environmental monitoring and mitigation. The $2.75 billion generated since 2006 by the Chukchi and Beaufort seas federal OCS lease sales would have brought $1 billion to the State of Alaska had the same revenue sharing provisions applied to Alaska as apply in the Gulf of Mexico. Now is a good time to have this kind of resolution passed and to see Alaska's best chance of OCS revenue sharing in Congress. Alaska's senior U.S. senator, Lisa Murkowski, is now the chair of the U.S. Senate Energy and Natural Resources Committee. Senator Murkowski sponsored legislation last year to offer a 37.5 percent share of OCS revenue, but it didn't get through and it's anticipated the senator will try again. He said HJR 4 will send a strong message from the State of Alaska to the U.S. Congress to support legislation to enact a fair and sensible system of federal revenue sharing. 1:08:14 PM CO-CHAIR TALERICO opened public testimony and closed it after ascertaining no one wished to testify. 1:08:57 PM REPRESENTATIVE SEATON said he has supported this in the past. Fair and equitable distribution needs to be there, so he appreciates the sponsor bringing this resolution forward. 1:09:24 PM REPRESENTATIVE HAWKER moved to report HJR 4 out of committee with individual recommendations and the accompanying zero fiscal note. There being no objection, HJR 4 was reported from the House Resources Standing Committee.