Legislature(2015 - 2016)SENATE FINANCE 532

04/10/2015 09:00 AM Senate FINANCE

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ HB 140 Presentation: Overview FY17 Operating Budget TELECONFERENCED
Heard & Held
Heard & Held
+ Bills Previously Heard/Scheduled: TELECONFERENCED
Moved SB 71 Out of Committee
SENATE BILL NO. 70                                                                                                            
     "An Act  relating to exceptions  from designation  as a                                                                    
     special purpose  site under  art. VIII,  sec. 7  of the                                                                    
     Constitution  of the  State of  Alaska for  portions of                                                                    
     Denali State Park, Captain  Cook State Recreation Area,                                                                    
     Nancy  Lake State  Recreation  Area,  and Willow  Creek                                                                    
     State Recreation  Area to allow leasing  a right-of-way                                                                    
     for a natural gas pipeline."                                                                                               
9:29:09 AM                                                                                                                    
Co-Chair MacKinnon addressed the legislation.                                                                                   
BEN ELLIS, DIRECTOR, DIVISION OF PARKS AND RECREATION,                                                                          
DEPARTMENT OF NATURAL RESOURCES, explained the legislation.                                                                     
He looked at the SB 70 Briefing Paper (copy on file):                                                                           
     SB  70 is  necessary to  open a  corridor through  four                                                                    
     state  legislatively  designated  areas  (Denali  State                                                                    
     Park  and Willow  Creek, Nancy  Lake, and  Captain Cook                                                                    
     State  Recreation Areas)  to the  right of  way leasing                                                                    
     act  for  the purpose  of  construction  a natural  gas                                                                    
     pipeline from the North Slope of Alaska.                                                                                   
     The bill would accomplish the following primary                                                                            
          1) Authorize the issuance of  a right of way lease                                                                    
          under AS38.35,  the Pipeline Right of  Way Leasing                                                                    
          Act for  a gas pipeline in  an identified corridor                                                                    
          through Denali State Park  and Willow Creek, Nancy                                                                    
          Lake, and Captain Cook State Recreation Areas.                                                                        
          2) Require the corridor  to be managed as parkland                                                                    
          and recreation areas until  leased under 38.35 and                                                                    
          returned  to  original  park and  recreation  area                                                                    
         management upon termination of the lease.                                                                              
          3) Provides  supplemental requirements  to reserve                                                                    
          traditional  means of  public access  and minimize                                                                    
          the impact  of a  pipeline on the  specific values                                                                    
          of park and recreation areas.                                                                                         
          4)  Clarifies  the  DNR  Commissioner's  power  to                                                                    
          delegate  condemnation  authority  to  the  lessee                                                                    
          does not apply  within the bounds of  the park and                                                                    
          recreation areas.                                                                                                     
          5)  Requires  the  gas pipeline  lease  be  issued                                                                    
          before January 1, 2020                                                                                                
     Why the bill is needed:                                                                                                    
          The  parks   at  issue  are  special   use  sites,                                                                    
          reserved   from   the   public   domain   by   the                                                                    
          legislature pursuant  to Article  VIII, Sec.  7 of                                                                    
          the  Alaska Constitution.  As a  result, they  are                                                                    
          not, without legislative  action, open for leasing                                                                    
          under AS 38.35.                                                                                                       
     Why this bill does not include State game refuges and                                                                      
     DNR Susitna Basin Rec Rivers:                                                                                              
          Although  some restrictions  on  multiple use  are                                                                    
          imposed  on the  state  game  refuges and  rivers,                                                                    
          these  areas are  not closed  to leasing  under AS                                                                    
          38.35 where  a lease would be  compatible with the                                                                    
          purposes of the reserves.                                                                                             
     Does the corridor specified in the bill suffice for                                                                        
     both the ASAP and AKLNG Projects:                                                                                          
          AGDC  and  AKLNG   have  worked  cooperatively  to                                                                    
          select a common alignment  for both projects. AGDC                                                                    
          has  completed its  route revision  to the  common                                                                    
          alignment and  are now calling it  Rev. 6.1. Field                                                                    
          efforts for both projects  have changed to reflect                                                                    
          the  common alignment  as  evidenced  in the  geo-                                                                    
          technical    site   locations    currently   being                                                                    
          conducted within Denali State Park.                                                                                   
9:35:06 AM                                                                                                                    
Senator  Dunleavy  wondered  if the  proposed  parcels  were                                                                    
within  the parks,  or were  any outside  of the  parks. Mr.                                                                    
Ellis  replied that  each proposed  parcel  within the  bill                                                                    
were in  one of the four  parks mentioned. He stated  that a                                                                    
portion would go  outside of the park, but  was not included                                                                    
in the legislation.                                                                                                             
Vice-Chair  Micciche asked  for assurance  that, other  than                                                                    
during  the  construction,  the public  use  was  previously                                                                    
permitted and  the park corridors  would not  be interrupted                                                                    
in the future. Mr. Ellis  replied that the land would remain                                                                    
park land, and available for  public use under park statutes                                                                    
during  the early  phase.  The  pipeline construction  would                                                                    
still allow some recreational usage.                                                                                            
Vice-Chair  Micciche  remarked  that  the  right-of-way  may                                                                    
improve recreational access.                                                                                                    
9:38:02 AM                                                                                                                    
AT EASE                                                                                                                         
9:40:21 AM                                                                                                                    
9:40:25 AM                                                                                                                    
Senator  Dunleavy wondered  if it  was advisable  to require                                                                    
that the  right-of-way leases had definable  and enforceable                                                                    
obligation  for  restoration  and  revegetation.  Mr.  Ellis                                                                    
replied that the intention was  to fully return to the state                                                                    
prior to any land disturbance.                                                                                                  
JOHN HUTCHINS,  ATTORNEY, DEPARTMENT OF LAW,  explained that                                                                    
any  pipeline  right-of-way  leases under  the  statute  was                                                                    
required  to include  a set  of covenants  that included  an                                                                    
assurance  that  the lessee  would  restore  the land  to  a                                                                    
condition acceptable by the commissioner.                                                                                       
Vice-Chair  Micciche  wondered   if  the  legislation  would                                                                    
conclude the  pipeline right-of-way  needs from  Prudhoe Bay                                                                    
to  the  terminus in  Nikiski.  Mr.  Ellis deferred  to  Mr.                                                                    
DON   PERRIN,   DIRECTOR,  PIPELINE   COORDINATION   OFFICE,                                                                    
DEPARTMENT  OF   NATURAL  RESOURCES   (via  teleconference),                                                                    
explained that the state agencies  had been working in terms                                                                    
of  field work  permitting,  and  coordination with  federal                                                                    
agencies. He stated that the  legislation would conclude the                                                                    
right-of-way needs for the project.                                                                                             
9:44:15 AM                                                                                                                    
Senator Hoffman  queried the percentage of  the right-of-way                                                                    
that  the  legislation  accomplished. He  also  wondered  if                                                                    
there  were further  problem areas  related to  acquisition.                                                                    
Mr. Perrin  replied that the  corridor varied in  width from                                                                    
on-half mile to  two miles. He explained that  the width was                                                                    
determined to ensure  adequate engineering and environmental                                                                    
Senator Hoffman remarked  that the line from  Prudhoe Bay to                                                                    
the  destination   to  tidewater.   He  wondered   how  much                                                                    
additional  right-of-way  was  needed for  the  project.  He                                                                    
queried   the   anticipated   problem   areas   related   to                                                                    
acquisition. Mr.  Perrin replied  that the bill  would allow                                                                    
for  completion of  land  as need  for  the right-of-way  on                                                                    
state  land. He  noted that  the act  only applied  to state                                                                    
land, and the legislation would allow for completion.                                                                           
Senator Hoffman queried the  percentage of additional leases                                                                    
that was required for all right-of-way.                                                                                         
FRANK   RICHARDS,  MANAGER   OF  PIPELINE   ENGINEERING  AND                                                                    
GOVERNMENT  AFFAIRS ALASKA  GASLINE DEVELOPMENT  CORPORATION                                                                    
(via  teleconference),  asked  for   a  restatement  of  the                                                                    
Senator   Hoffman  wondered   how   much  right-of-way   was                                                                    
currently acquired and  how much was yet to  be acquired. He                                                                    
also  queried   the  possible   problem  areas   for  future                                                                    
acquisition. Mr.  Richards replied that the  legislature had                                                                    
specifically required Department  of Natural Resources (DNR)                                                                    
to  provide Alaska  Gasline  Development Corporation  (AGDC)                                                                    
the Title  38 lands  through a  state right-of-way  in 2011,                                                                    
which  represented approximately  55 percent  of the  Alaska                                                                    
Stand Alone  Pipeline (ASAP)  right-of-way. The  addition of                                                                    
the lands  from the  legislation gave access  through Denali                                                                    
State Park, Willow Creek, and  Nancy Lakes. That mileage was                                                                    
approximately  another   5  percent  of  state   lands.  The                                                                    
completion   of   the  supplemental   environmental   impact                                                                    
statement (EIS) would show an  outcome of record of decision                                                                    
by the Department of the  Interior Bureau of Land Management                                                                    
which would provide the federal  right-of-way, at 30 percent                                                                    
right-of-way.   The  project   would  be   approximately  90                                                                    
percent,  with  the  remaining   10  percent  in  municipal,                                                                    
borough,  private  land  ownership, and  native  corporation                                                                    
allotments still yet to be acquired.                                                                                            
9:49:21 AM                                                                                                                    
Senator Hoffman  wondered if there were  anticipated problem                                                                    
areas  that  would  require  eminent  domain.  Mr.  Richards                                                                    
replied that there  were very little, if any  use of eminent                                                                    
domain. He  explained that the legislature  allowed AGDC the                                                                    
use  of  eminent  domain  through   HB  4  and  in  existing                                                                    
Senator  Hoffman restated  his  question as  related to  the                                                                    
AKLNG  project. Mr.  Richards responded  that the  AKLNG and                                                                    
ASAP currently  shared a  common route  from Prudhoe  Bay to                                                                    
the Susitna River  Bridge. At that point,  ASAP traversed to                                                                    
the east of the river, and  the AKLNG headed west toward the                                                                    
Cook Inlet  Crossing. He agreed  to provide  information for                                                                    
the actual land ownership requirements for AKLNG.                                                                               
Senator  Hoffman  queried  the   timeframe  to  acquire  the                                                                    
required  additional  lands  for project  construction.  Mr.                                                                    
Richards replied that the private  and municipal owned lands                                                                    
would not be determined  until the final investment decision                                                                    
to advance the project.                                                                                                         
Co-Chair  MacKinnon wondered  if there  were any  additional                                                                    
comments on  SB 70.  Mr. Richards replied  that SB  70 would                                                                    
allow either  pipeline project to  proceed through  the park                                                                    
lands. The  original intent of the  legislature provided the                                                                    
right-of-way  across state  lands, so  the bill  allowed for                                                                    
the land to advance the pipeline project.                                                                                       
Senator Bishop  queried the  difference on  the right-of-way                                                                    
for the two  projects. He understood that the  AKLNG was 180                                                                    
feet,  and the  ASAP was  120 feet.  Mr. Richards  responded                                                                    
that he did  not have the specifics for  AKLNG. He explained                                                                    
that moving  a large  diameter pipe  required areas  to work                                                                    
and  dispose.  He stated  that  there  was likely  different                                                                    
equipment for the different sized pipe.                                                                                         
Co-Chair MacKinnon  wondered if  the corridor  would require                                                                    
the removal  of trees  for an extended  period of  time. Mr.                                                                    
Ellis  replied  that the  land  would  return to  a  natural                                                                    
state. He stated that there was  normally a five to ten year                                                                    
period of time that would allow for full revegetation.                                                                          
Co-Chair MacKinnon CLOSED public testimony.                                                                                     
9:54:50 AM                                                                                                                    
AT EASE                                                                                                                         
9:56:21 AM                                                                                                                    
Vice-Chair  Micciche wondered  what  the right-of-way  would                                                                    
look  like at  post-construction. Mr.  Ellis responded  that                                                                    
that corridor would  be clear for construction.  The 50 foot                                                                    
right-of-way  for the  pipeline  would be  clear. He  stated                                                                    
that there  may be  a recreational  trail near  the pipeline                                                                    
that would also provide access to the line.                                                                                     
SB  70  was   HEARD  and  HELD  in   committee  for  further                                                                    

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