Legislature(1999 - 2000)

04/18/2000 03:00 PM RES

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
                    SENATE RESOURCES COMMITTEE                                                                                
                          April 18, 2000                                                                                        
                             3:00 p.m.                                                                                          
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Senator Rick Halford, Chairman                                                                                                  
Senator Robin Taylor, Vice Chairman                                                                                             
Senator Jerry Mackie                                                                                                            
Senator Lyda Green                                                                                                              
Senator Pete Kelly                                                                                                              
Senator Georgianna Lincoln                                                                                                      
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Senator Sean Parnell                                                                                                            
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
CS FOR  HOUSE BILL  NO. 432(FIN)"An  Act extending  the termination                                                             
date  of  the  Board  of Storage   Tank Assistance;   expanding  the                                                            
authority of the  board to issue recommendations concerning  cleanup                                                            
decisions;  relating   to  the  eligibility  of  certain   nonprofit                                                            
entities  for financial  assistance  under  the tank  cleanup  grant                                                            
program and  the tank upgrading and  closure program; and  providing                                                            
for an effective date."                                                                                                         
     -MOVED CSHB 432(FIN)am OUT OF COMMITTEE                                                                                    
                                                                                                                                
CS FOR HOUSE BILL NO. 414(O&G)                                                                                                  
"An  Act relating  to  the appointment  and  qualifications  of  the                                                            
members  of the  Alaska Oil  and Gas  Conservation  Commission;  and                                                            
providing for an effective date."                                                                                               
     -MOVED CSHB 414(O&G) OUT OF COMMITTEE                                                                                      
                                                                                                                                
SENATE BILL NO. 308                                                                                                             
"An  Act relating  to certain  passenger  vessels  operating in  the                                                            
marine waters of the state."                                                                                                    
     -MOVED SB 308 OUT OF COMMITTEE                                                                                             
                                                                                                                                
CS FOR HOUSE BILL NO. 108(FIN) am                                                                                               
"An Act  relating to the  use, operation,  and regulation of  boats;                                                            
establishing a uniform  state waterway marking system; and providing                                                            
for an effective date."                                                                                                         
     -MOVED SCS CSHB 108(RES) OUT OF COMMITTEE                                                                                  
                                                                                                                                
CS FOR HOUSE BILL NO. 206(FIN) am                                                                                               
"An Act relating  to migratory game  bird hunting, to a nonresident                                                             
combined  sport fishing  and  hunting  license, to  the nonresident                                                             
military small  game and sport fishing license, to  applications for                                                            
certain  licenses, tags,  registrations, and  permits issued  by the                                                            
Department  of   Fish  and  Game,  to  sport  fishing   license  and                                                            
anadromous  king salmon tag fees for  residents of Yukon  Territory,                                                            
Canada, and to  duplicate crewmember licenses; and  providing for an                                                            
effective date."                                                                                                                
     -MOVED SCS CSHB 206(RES) OUT OF COMMITTEE                                                                                  
                                                                                                                                
CS FOR HOUSE BILL NO. 349(FIN)                                                                                                  
"An Act relating to the  Board of Game, means of access for hunting,                                                            
trapping, and fishing,  the definition of 'means' and 'methods,' and                                                            
hunting  safety  education   and  wildlife  conservation   education                                                            
programs;  and relating to  the purposes of  game refuges,  fish and                                                            
game critical habitat areas, and public use areas."                                                                             
     -SCHEDULED BUT NOT HEARD                                                                                                   
                                                                                                                                
PREVIOUS SENATE COMMITTEE ACTION                                                                                              
                                                                                                                                
HB 432 - See Resources Committee minutes dated 4/17/00.                                                                         
                                                                                                                                
SB 308 - See Resources Committee minutes dated 4/17/00.                                                                         
                                                                                                                                
HB 414 - No previous Senate action.                                                                                             
                                                                                                                                
HB 206 - No previous Senate action.                                                                                             
                                                                                                                                
HB 349 - No previous Senate action.                                                                                             
                                                                                                                                
HB 108 - See Resources Committee minutes dated 4/7/00.                                                                          
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
Jim Hayden                                                                                                                      
Division of Spill Prevention and Response                                                                                       
Department of Environmental Conservation                                                                                        
410 Willoughby Ave.                                                                                                             
Juneau, AK  99801-1795                                                                                                          
POSITION STATEMENT:  Answered questions regarding HB 432.                                                                     
                                                                                                                                
Michael Abbott                                                                                                                  
Economic Development Assistant                                                                                                  
Office of the Governor                                                                                                          
500 West 7th Ave., Suite 1700                                                                                                   
Anchorage, AK  99503                                                                                                            
POSITION STATEMENT:  Opposed to HB 414.                                                                                       
                                                                                                                                
Jeff Logan                                                                                                                      
Legislative Aide to Representative Green                                                                                        
Alaska State Capitol                                                                                                            
Juneau, AK  99801-1182                                                                                                          
POSITION STATEMENT: Testified for the sponsor of HB 414.                                                                      
                                                                                                                                
J. David Norton, P.E.                                                                                                           
Alaska Oil and Gas Conservation Commission                                                                                      
3001 Porcupine Drive                                                                                                            
Anchorage, AK  99501                                                                                                            
POSITION STATEMENT:  Opposed to HB 414.                                                                                       
                                                                                                                                
Representative Joe Green                                                                                                        
Alaska State Capitol                                                                                                            
Juneau, AK  99801-1182                                                                                                          
POSITION STATEMENT:  Answered questions about HB 414.                                                                         
                                                                                                                                
John Manley                                                                                                                     
Legislative Aide to Representative Harris                                                                                       
Alaska State Capitol                                                                                                            
Juneau, AK  99801-1182                                                                                                          
POSITION STATEMENT:  Testified for the sponsor of HB 206.                                                                     
                                                                                                                                
Dick Bishop                                                                                                                     
Alaska Outdoor Council                                                                                                          
P.O. Box 73902                                                                                                                  
Fairbanks, AK 99707                                                                                                             
POSITION STATEMENT:  Supports HB 206 and proposed an amendment.                                                               
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
TAPE 00-28, SIDE A                                                                                                            
Number 001                                                                                                                      
                                                                                                                                
CHAIRMAN HALFORD  called the Senate  Resources Committee  meeting to                                                          
order at 3:00 p.m.  Present  were Senators Mackie, Green, Taylor and                                                            
Chairman Halford.   The first order  of business to come  before the                                                            
committee was CSHB 432(FIN)am.                                                                                                  
                                                                                                                                
              HB 432-BOARD OF STORAGE TANK ASSISTANCE                                                                       
                                                                                                                                
CHAIRMAN HALFORD announced that the committee has heard CSHB                                                                    
432(FIN)am and he would like to move the bill on its way.                                                                       
                                                                                                                                
SENATOR TAYLOR asked about the application for storage tank                                                                     
assistance submitted by the town of Hyder.                                                                                      
                                                                                                                                
MR. JIM HAYDEN, Department of Environmental Conservation, informed                                                              
Senator  Taylor  that  the application   does not  fall  under  this                                                            
program  although   he  is  familiar  with  it  because   the  Hyder                                                            
association  asked him  to check some  numbers for  an above  ground                                                            
tank.   Apparently  the  Department  of  Transportation  and  Public                                                            
Facilities is doing away  with its maintenance station and is making                                                            
land available  to the  town.  The  town plans  to install an  above                                                            
ground  tank   and  is  looking  for   an  appropriation   from  the                                                            
legislature to fund it.                                                                                                         
                                                                                                                                
SENATOR TAYLOR  asked if there is  another program available  to the                                                            
town of Hyder to fund the project.                                                                                              
                                                                                                                                
MR. HAYDEN said he was  not sure whether the Alaska Energy Authority                                                            
Program  (under   the  Alaska  Industrial  Development   and  Export                                                            
Authority)  would cover that  cost.  It does  cover rural tanks  but                                                            
Hyder would have to get on that list.                                                                                           
                                                                                                                                
An unidentified  speaker  pointed out  that a provision  in SB  128,                                                            
which  passed  last  year,  allows  for  direct  appropriations  for                                                            
specific  projects out  of the storage  tank assistance  fund.   The                                                            
Hyder project  could  be funded through  that program  but it  would                                                            
have to be done through a direct appropriation.                                                                                 
                                                                                                                                
MR. HAYDEN clarified that fund is limited to underground tanks.                                                                 
                                                                                                                                
The  unidentified  speaker  pointed out  one  section  of that  bill                                                            
provides enough flexibility to fund the Hyder project.                                                                          
                                                                                                                                
SENATOR MACKIE moved CSHB  432(FIN)am from committee with individual                                                            
recommendations.  There being no objection, the motion carried.                                                                 
                                                                                                                                
                  SB 308-MARINE PASSENGER VESSELS                                                                           
                                                                                                                                
SENATOR  MACKIE   moved  SB  308  from  committee  with   individual                                                            
recommendations.  There being no objection, the motion carried.                                                                 
                                                                                                                                
             HB 414-OIL & GAS CONSERVATION COMMISSION                                                                       
                                                                                                                                
JEFF LOGAN,  legislative aide to Representative  Joe Green,  sponsor                                                            
of  HB 414,  made the  following  comments.   HB 414  clarifies  the                                                            
requirements  to  serve  on  the Alaska  Oil  and  Gas Conservation                                                             
Commission  (AOGCC).   It is the  sponsor's opinion  that there  has                                                            
been some  question about  the qualifications  and requirements  for                                                            
service on the  board over the past five or six years.   HB 414 will                                                            
help the  Governor and  legislature make  appointments that  will be                                                            
better for  the oil fields  and better for  the people of Alaska  by                                                            
requiring certain technical expertise of the people who serve.                                                                  
                                                                                                                                
SENATOR  TAYLOR  asked if  HB 414  will  ensure that  a "down-hole"                                                             
engineer will serve on the AOGCC.                                                                                               
                                                                                                                                
MR.  LOGAN said  yes,  it will  require  that  one of  the  members,                                                            
appointed  and confirmed  by the legislature,  will have  subsurface                                                            
experience.                                                                                                                     
                                                                                                                                
CHAIRMAN  HALFORD read  the required  qualifications  in HB 414  and                                                            
asked how many people in Alaska will qualify for that position.                                                                 
                                                                                                                                
MR. LOGAN said  the number is a moving target but,  according to the                                                            
industry  people he  has spoken with  and the  Society of  Petroleum                                                            
Engineers, about 500 people would qualify.                                                                                      
                                                                                                                                
MR. MIKE ABBOTT, Special  Assistant to the Governor, pointed out the                                                            
Administration  has two  serious concerns  with HB  414.  The  first                                                            
concern is  programmatic; the Administration  is concerned  that the                                                            
proposed bill will make  it difficult, if not impossible, to resolve                                                            
some of the clarification  issues that the sponsor  is trying to get                                                            
at in terms  of who will  be considered qualified.   As an  example,                                                            
the bill talks primarily  about the engineering position but it also                                                            
deals with the  geologist position.  By the Administration's  count,                                                            
based on  registration information  from the  American Institute  of                                                            
Petroleum  Geologists,  about  12  Alaskans  will  qualify  for  the                                                            
geologist  position  if  HB  414  passes.    Although  he  does  not                                                            
necessarily dispute  that 500 people in Alaska are  eligible for the                                                            
engineering  position,  a  lot depends  on  how one  interprets  the                                                            
standard.                                                                                                                       
                                                                                                                                
MR. ABBOTT continued.   Section 2 of the bill lays out two different                                                            
ways  that  a person  can  become  qualified.    First,  a  licensed                                                            
engineer  who  is  qualified  as  a  petroleum   engineer  would  be                                                            
qualified.   That is an  interesting standard  because a person  can                                                            
become  a   petroleum  engineer  with   less  than  four   years  of                                                            
professional  experience.  A person  with a degree from a  five year                                                            
program  would only  need three years  of actual  experience  and no                                                            
supervisory  experience,  no Alaskan  experience,  and no  down-hole                                                            
experience.   A  person with  a degree  from a  four year  petroleum                                                            
engineering program would  need four years of experience to become a                                                            
registered engineer.  That  will allow a person, albeit licensed but                                                            
without a lot of experience, to sit on the AOGCC.                                                                               
                                                                                                                                
MR.  ABBOTT  explained  that the  second  way  a person  can  become                                                            
qualified  is through Section  (B) which requires  a person  to meet                                                            
three  standards.     The  first  standard  requires   10  years  of                                                            
professional  subsurface  experience  in drilling  well operations,                                                             
production process operations,  etc.  It is a little confusing since                                                            
the  production  process  operation  consists  of  surface  oriented                                                            
production work  and not subsurface work.   Second,  one has to have                                                            
a degree from a qualified  program.  The third standard requires one                                                            
to  have completed  university  or  industry  training  that  covers                                                            
certain issue  areas specific to petroleum  engineering.   The third                                                            
standard is fairly unquantified  because industry training sometimes                                                            
consists of  day or week long sessions.   University programs  might                                                            
include  seminars.   It is unclear  whether  this standard  requires                                                            
course  work, degrees,  certificates  or attendance  so  it will  be                                                            
difficult  to know  whether a  candidate meets  the qualifications.                                                             
The standard appears to be a university degree.                                                                                 
                                                                                                                                
MR. ABBOTT explained the  particularly troubling part of the Section                                                            
(B)  standard is  that  the engineer  would  not be  required to  be                                                            
registered.    Currently,  the  AOGCC  commissioner  who  fills  the                                                            
engineer's  seat has a  lot of direct  supervisory responsibilities                                                             
over the  rest of the engineering  staff, which  is the bulk  of the                                                            
professional  staff  on the  AOGCC.   There  are  some professional                                                             
concerns  in the  engineering  community  about  whether  registered                                                            
engineers can be supervised  by non-registered engineers.  Right now                                                            
the  AOGCC  has  been hiring  staff  engineers  and  the  AOGCC  has                                                            
required registration for those positions.                                                                                      
                                                                                                                                
MR. ABBOTT  said HB  414 implies  that the sitting  Chairman  of the                                                            
AOGCC, who  was confirmed by the legislature  three years  ago, will                                                            
not be  eligible for reappointment  when his  term is up later  this                                                            
year.  The  Administration finds it  troubling that someone  who has                                                            
served as the  Chair without complaint  from the industry  or public                                                            
at  large  would  automatically  be  removed  as a  result  of  this                                                            
legislation.   This gentleman has more than 20 years  of engineering                                                            
experience  in the Alaskan oil fields  and is a former president  of                                                            
VECO Engineering.                                                                                                               
                                                                                                                                
CHAIRMAN  HALFORD  asked   if the  AOGCC   Chairman  owned  his  own                                                            
engineering firm.                                                                                                               
                                                                                                                                
MR. ABBOTT  said he owned  a company named  Christenson Engineering                                                             
which was  subsequently purchased  by VECO.   In the course  of that                                                            
action, Mr.  Christenson became the  President of VECO Engineering.                                                             
Mr. Abbott  noted that he, a representative  from the Department  of                                                            
Law,  and  other  AOGCC  Commissioners   were  available  to  answer                                                            
questions.                                                                                                                      
                                                                                                                                
SENATOR GREEN recalled  that lengthy discussions occurred during the                                                            
last  approval  process  and  said,  with all  due  respect  to  Mr.                                                            
Christianson  who she  believes  is doing  a fine  job, some  people                                                            
questioned  whether  he was  a duly  qualified candidate  under  the                                                            
previous criteria.  She  said she hates to think that is what HB 414                                                            
is about.   She questioned  whether there  is a place under  Section                                                            
(B) where  the word "registered"  should be  used.  Regarding  fluid                                                            
flow through subsurface  formations, Senator Green  thought it might                                                            
be difficult  to have  ten years  of experience  in that  particular                                                            
field.   She suggested  that instead,  the criteria  require  that a                                                            
person  have   that  experience  coupled   with  other  underground                                                             
experience.                                                                                                                     
                                                                                                                                
MR.  ABBOTT  replied  that  the  Administration  continues  to  have                                                            
concerns about  any standards that will not allow  a person with Mr.                                                            
Christenson's background to serve.                                                                                              
                                                                                                                                
SENATOR GREEN  agreed but thought  the member should have  the right                                                            
to say we have  some new standards that we think should  be in place                                                            
for this particular commission.                                                                                                 
                                                                                                                                
MR.  ABBOTT  said  he  does  not  disagree  and  it  is  up  to  the                                                            
legislature  to make  that decision  but, using  the example  of Mr.                                                            
Christenson, he would tell him the standard is not appropriate.                                                                 
                                                                                                                                
SENATOR  TAYLOR  pointed  out the  Alaska  Society  of Professional                                                             
Engineers  (ASPE) opposes HB  414 based on  the fact that this  bill                                                            
does not  require that  the engineer  be certified  by the State  of                                                            
Alaska.                                                                                                                         
                                                                                                                                
MR. ABBOTT said that is correct.                                                                                                
                                                                                                                                
SENATOR TAYLOR  asked whether  the reference  to AS 08.48 on  page 2                                                            
(Subsection  A)  applies to  a  certificate  of registration  as  an                                                            
engineer under Alaska law.                                                                                                      
                                                                                                                                
MR. ABBOTT explained  one can qualify under (A) or  (B).  Subsection                                                            
(A) is fine in  terms of registered engineers.  Subsection  (B) does                                                            
not require an engineer to be registered.                                                                                       
                                                                                                                                
SENATOR  TAYLOR thought  Section (B)  looks like  it talks about  an                                                            
engineer because it no longer says "petroleum engineer."                                                                        
                                                                                                                                
MR. ABBOTT  replied "...  one of the  concerns we  have with  (B) is                                                            
that it would  allow a non-registered engineer - of  which there are                                                            
a lot, especially within  the oil and gas industry - I don't mean to                                                            
misstate  this - there are  a lot of fine  engineers within  the oil                                                            
and gas industry,  and because they  don't generally work  on public                                                            
facilities,  they don't  necessarily  have  to be  registered to  do                                                            
work.  And so, I'm not  calling into question what are a lot of very                                                            
experienced  and very  successful engineers.   Whether  or not  they                                                            
could be  supervising other  professional  certified engineers  is a                                                            
concern and it's one that  we think is - well, it's certainly one of                                                            
our serious concerns with the bill as proposed right now."                                                                      
                                                                                                                                
SENATOR  TAYLOR  asked  if the  Administration's  concern  would  be                                                            
alleviated if Subsection (B) was deleted.                                                                                       
                                                                                                                                
MR. ABBOTT said  the Administration would not have  that concern but                                                            
Subsection  (A) is problematic for  two reasons.  First,  it applies                                                            
to a  very narrow  community  of individuals.    Subsection (B)  was                                                            
included  primarily because  such a limited  number of people  would                                                            
qualify under Subsection  (A).  Subsection (A) as a stand alone does                                                            
not require a  lot of experience.  A person can become  a registered                                                            
petroleum   engineer  in  Alaska   with  three  or  four   years  of                                                            
experience, post graduation.                                                                                                    
                                                                                                                                
SENATOR TAYLOR suggested  removing Section (B) and adding to Section                                                            
(A) some  of the experience  requirements.   He asked if that  would                                                            
narrow the field of 12 even further.                                                                                            
                                                                                                                                
MR.  ABBOTT  clarified   that  the  field  of  12  has  to  do  with                                                            
geologists.    To   his  knowledge,  there  are  about   47  Alaskan                                                            
registered petroleum  engineers.  About 40 others  are non-residents                                                            
who are registered to work in Alaska.                                                                                           
                                                                                                                                
SENATOR LINCOLN  asked if only 12  people qualify for the  geologist                                                            
position  because of the  requirement of  ten years of professional                                                             
experience.                                                                                                                     
                                                                                                                                
MR. ABBOTT  replied that right  now if a person  is registered  as a                                                            
professional geologist  with the American Institute  of Professional                                                            
Geologists, the person  has the opportunity to indicate what his/her                                                            
professional   expertise  includes.     There  is  not  a   discrete                                                            
registration for petroleum geology.                                                                                             
                                                                                                                                
CHAIRMAN TAYLOR asked what these jobs pay.                                                                                      
                                                                                                                                
MR. ABBOTT replied, "About 85."                                                                                                 
                                                                                                                                
CHAIRMAN TAYLOR questioned  why a petroleum geologist with ten years                                                            
of field  experience  would want  to work  for $85,000  as an  AOGCC                                                            
Commissioner.                                                                                                                   
                                                                                                                                
MR.  ABBOTT said  it is  difficult  to recruit  people  for the  two                                                            
directed Commission seats.                                                                                                      
                                                                                                                                
SENATOR LINCOLN suggested  moving lines 3 and 4 on page 2 up to line                                                            
2 so it would  read, "who holds a certificate of registration  as an                                                            
engineer under AS 08.48.  and under regulations adopted to implement                                                            
that chapter."                                                                                                                  
                                                                                                                                
MR. ABBOTT  said the statute could  be left as is under (1)  because                                                            
it has the licensed professional  engineer standard in it right now.                                                            
The current standard is  very short which doesn't mean it is simple.                                                            
There have been concerns  raised in the past about what qualifies  a                                                            
professional   engineer   regarding   education   and  professional                                                             
background  in the field  of petroleum geology.   That is clearly  a                                                            
term that is subject to interpretation.                                                                                         
                                                                                                                                
SENATOR GREEN  said Alaska needs more  discovery and drilling  which                                                            
would increase  the number  and level of  engineers and geologists.                                                             
This discussion  would be  unnecessary because  there would  be many                                                            
people who qualify.                                                                                                             
                                                                                                                                
There being  no further  questions of Mr.  Abbott, CHAIRMAN  HALFORD                                                            
took teleconference testimony.                                                                                                  
                                                                                                                                
Number 1535                                                                                                                     
                                                                                                                                
MR. DAVE NORTON,  AOGCC Commissioner,  recapped a letter  he sent to                                                            
committee members summarizing  his concerns about HB 414.  His first                                                            
point is that  being a professional  engineer implies that  a person                                                            
must follow  a code of professional  conduct.  That would  provide a                                                            
safeguard  to the public  and ensure that  their best interests  are                                                            
being looked after.   Subsection B of HB 414 goes  the other way and                                                            
excludes professional engineers  with critical experience in the oil                                                            
and gas industry from the  qualifications, which is what will happen                                                            
in  Mr.  Christenson's  case.    Third,  the  bill,  with  its  very                                                            
prescriptive  requirements  for  down-hole,  subsurface engineering                                                             
experience  only, limits  qualified candidates  and also limits  the                                                            
purview of the AOGCC.   It has not only subsurface responsibilities,                                                            
it  has  responsibilities  for  surface   activities.    His  letter                                                            
describes  that problem in  detail.  He feels  the requirements  for                                                            
engineers should  be plain and clear  and leave room for  discretion                                                            
in appointments.   An engineer should be required,  at a minimum, to                                                            
have experience  in the Alaska  oil and gas  industry.  The  bill is                                                            
overly  prescriptive and  complicated.   It tries  to fix  something                                                            
that is not broken.  He is opposed to HB 414.                                                                                   
                                                                                                                                
MR. LOGAN  asked to speak  to HB 274, which  was virtually  the same                                                            
bill introduced during  the previous legislature.  He said regarding                                                            
the qualifications,  Representative  Green started  out with  a bill                                                            
that  said, "holds  a certificate  of  registration  as an  engineer                                                            
under AS 08.48" and then  listed the qualifications under Subsection                                                            
(B).   The  Administration  came  to the  table  and said  that  was                                                            
unacceptable.   Representative Green then changed  that language for                                                            
the  Administration.    During hearings  in  House  committees,  the                                                            
Administration  never came forward  to express any displeasure  with                                                            
the language  as  it is  stated here  today.   Representative  Green                                                            
assumed  the bill  was okay  with the  Administration.   Mr.  Robert                                                            
Christenson  of the  AOGCC  did testify,  however.   He  made a  few                                                            
suggestions  that were incorporated  into the  bill.  The first  was                                                            
Section 1 which  gives the Governor direction to give  preference to                                                            
Alaska experience.   The  second suggestion  by Mr. Christenson  was                                                            
the phrase,  "production  process operations"  which the  Governor's                                                            
representative  said he had some questions  about.  That  phrase was                                                            
incorporated into the bill.                                                                                                     
                                                                                                                                
MR. LOGAN clarified  for the record  that the engineers who  qualify                                                            
under  Subsection  (B)  are  very  qualified,  technically   trained                                                            
individuals.    A  number  of  engineers   in  this  state  are  not                                                            
registered  Alaska petroleum  engineers but  they are registered  in                                                            
another  state.   They  have extensive  training  and  have been  in                                                            
Alaska a number  of years and are very qualified to  serve.  Much of                                                            
the  description  of what  would make  a  good candidate  came  from                                                            
suggestions by  people in the industry.  Representative  Green asked                                                            
them the  question, "With  millions of dollars  of assets at  stake,                                                            
what are  the kinds of  people that you  have responsible for  those                                                            
assets?"    He then  put  the  bill  together  and  sent it  to  the                                                            
University of Alaska Fairbanks  Petroleum Engineering Department for                                                            
review.   The  department  thought  the language  described  a  good                                                            
candidate  for  that position.    Mr. Logan  said  he  is sorry  the                                                            
Administration  did not come forward earlier for clarification.   He                                                            
also  acknowledged  that Representative  Green  was  unaware of  the                                                            
opposition  from a professional engineering  group.  That  group did                                                            
not contact him.                                                                                                                
                                                                                                                                
SENATOR  LINCOLN referred  to  Section 1  and questioned  where  the                                                            
"wiggle room" is.                                                                                                               
                                                                                                                                
MR. LOGAN replied  that in order to be a certified  Alaska engineer,                                                            
one must  pass what is known  as the Arctic  test - a specific  test                                                            
dealing  with Arctic engineering  measures.   Therefore, to  qualify                                                            
for (A),  one has already  met the requirements  in Section  1 so no                                                            
"wiggle room"  is needed.  He then asked Senator Lincoln  to clarify                                                            
her question.                                                                                                                   
                                                                                                                                
SENATOR LINCOLN  stated that if under  Subsection (B) there  are 500                                                            
people to choose  from, but under  Section 2 there are only  12, the                                                            
Governor's  only option is within  the criteria that is laid  out in                                                            
HB 414.                                                                                                                         
                                                                                                                                
MR. LOGAN said  that is true, but  on the geologist point,  in order                                                            
to be certified  under AS 08.02.011,  one must be a member  of AIPG,                                                            
the Association  of  Professional  Geologists.   To be  a member  of                                                            
AIPG, one needs  eight years of experience.  Therefore,  just to get                                                            
the license one needs eight  years of experience so HB 414 only asks                                                            
for two  more years.  During  testimony given  to the House  Oil and                                                            
Gas Committee,  former  Commissioner  Harold Heinze  made the  point                                                            
that these  are minimum qualifications.   The bill does not  require                                                            
the Governor to  appoint the least qualified people,  it simply sets                                                            
the floor.                                                                                                                      
                                                                                                                                
SENATOR LINCOLN  pointed out  the bill was  introduced on March  15.                                                            
She  asked Mr.  Logan if  today is  the first  time he  has heard  a                                                            
response from the Administration.                                                                                               
                                                                                                                                
MR. LOGAN  said that is  correct and the  Administration's  concerns                                                            
were a shock  to him because  at the end  of the process during  the                                                            
previous   legislature,   the  bill   was  in   a  House   Resources                                                            
subcommittee  for  six  weeks  where  good  participation  from  all                                                            
parties took place and everyone was okay with the bill.                                                                         
                                                                                                                                
SENATOR  LINCOLN asked  Mr. Abbott  why the  Administration has  not                                                            
expressed its opposition to HB 414 prior to today.                                                                              
                                                                                                                                
MR. ABBOTT said  the Administration's opposition to  HB 414 has been                                                            
consistent from  the day the bill was introduced and  throughout the                                                            
confirmation process  for the previous engineering  commissioner and                                                            
the current  commissioner.   The  Administration  has made it  clear                                                            
that  it prefers  the  existing  standard.   He  did not  think  the                                                            
sponsor has ever  doubted that the Administration  is satisfied with                                                            
the standard as  written and that it has opposed efforts  to mandate                                                            
a more specific requirement,  specifically the subsurface experience                                                            
requirement.                                                                                                                    
                                                                                                                                
SENATOR LINCOLN asked if  the Administration testified in opposition                                                            
to this bill in the House.                                                                                                      
                                                                                                                                
MR. ABBOTT  replied, "We  have never testified  in support  of this.                                                            
No Administration   official has  ever testified  in  a manner  that                                                            
...."                                                                                                                           
                                                                                                                                
SENATOR  LINCOLN  clarified   that  her  question  was  whether  the                                                            
Administration testified in opposition to HB 414.                                                                               
                                                                                                                                
MR. ABBOTT  said, "Yes, Mr. Christenson  testified in the  House Oil                                                            
and Gas Committee that  the Administration opposed the legislation."                                                            
                                                                                                                                
CHAIRMAN TAYLOR announced  that because a quorum was not present, he                                                            
would  hold  the  legislation   and  recess  the  Senate   Resources                                                            
Committee to the call of the chair.                                                                                             
                                                                                                                                
CHAIRMAN  HALFORD  called the  Senate  Resources Committee  back  to                                                            
order  at 7:00  p.m.  Present  were  Senators Lincoln,  Pete  Kelly,                                                            
Green, Mackie, Taylor,  and Chairman Halford.  The committee took up                                                            
HB 108.                                                                                                                         
                                                                                                                                
          HB 108-USE, REGULATION, AND OPERATION OF BOATS                                                                    
                                                                                                                                
CHAIRMAN  HALFORD   announced  that  a  proposed  Senate   Resources                                                            
committee  substitute  had been  prepared for  HB 108  and that  the                                                            
committee has  worked extensively  with the sponsor on the  areas of                                                            
question.   The  committee  substitute  places  the program  in  the                                                            
Department  of Public Safety with  only the education portion  going                                                            
to the Department  of Natural Resources.   It parallels the  federal                                                            
requirement  of a  three year  registration  renewal.   A  technical                                                            
amendment  needs to be  made on  page 10 of  the proposed  committee                                                            
substitute:   "90" should  be changed to "30"  which applies  to the                                                            
exemption that  allows a non-resident to operate a  non-powered boat                                                            
in the  State.  The  90 days would  allow a person  to leave  a boat                                                            
here year  round and  never have  to register  so the exemption  was                                                            
changed to 30 days.  He  stated that he does not support taking over                                                            
this  federal   program  but  finds   the  bill  to  be   the  least                                                            
objectionable way to do it.                                                                                                     
                                                                                                                                
SENATOR TAYLOR  moved to adopt SCS CSHB 108(RES) (Version  L) as the                                                            
working document  before the committee.   There being no  objection,                                                            
the motion carried.   CHAIRMAN HALFORD announced that  the committee                                                            
substitute  had been adopted and it  includes the change  on page 10                                                            
to 30 days.                                                                                                                     
                                                                                                                                
SENATOR MACKIE  noted he understands  that the sponsor supports  the                                                            
committee substitute  and will not  be advocating for more  changes.                                                            
He then  moved  SCS CSHB  108(RES)  from committee  with  individual                                                            
recommendations.   There  being no  objection, the  bill moved  from                                                            
committee.                                                                                                                      
                                                                                                                                
CHAIRMAN HALFORD noted  that Representative Green was present so the                                                            
committee would revisit HB 414.                                                                                                 
                                                                                                                                
REPRESENTATIVE  JOE GREEN,  sponsor  of HB 414,  apologized for  not                                                            
knowing what  transpired earlier  in the day,  but said the  problem                                                            
remains that with  the present Administration's appointments  to the                                                            
AOGCC,  Alaska has  lost  one of  the most  critical  parts of  that                                                            
Commission,  and  that is  technical  expertise.   When  he came  to                                                            
Alaska in 1977,  the Oil and Gas Division  did essentially  the same                                                            
things that  the AOGCC  does now: monitoring  and supervising  down-                                                            
hole and surface  operations in the  oil fields, something  that all                                                            
states that have oil field operations do.                                                                                       
                                                                                                                                
In 1977, the Oil  and Gas Division was in the Department  of Natural                                                            
Resources  (DNR).   It had,  and the  AOGCC  now has,  the power  of                                                            
compulsory  imposition.  That  has not been  an issue in this  state                                                            
because Alaska  has not had differential  royalty owners.   However,                                                            
as  development   moves   across  the  Colville   River,   different                                                            
subsurface  owners are likely  in the future.   There may be  a time                                                            
when a subsurface  owner does  not want to  become involved.   If 65                                                            
percent of  the other subsurface owners  agree to a unit,  the AOGCC                                                            
has  the  authority  to  create  that  unit  under   the  compulsory                                                            
unitization  statute.   In the late  1970s, the  AOGCC was  created,                                                            
much  like the  Texas railroad  commission.    It has  always had  a                                                            
petroleum engineer  as a commissioner,  the reason being  that while                                                            
things are  out of sight,  they are  out of mind,  and if no  one is                                                            
guarding  the  hen house,  a  lot  of chicks  could  get  away.   An                                                            
underground  blow-out  into another  reservoir  or other  disastrous                                                            
things could happen.   That would also apply if unitization  occurs.                                                            
He believes  it is critical that a  person with technical  knowledge                                                            
and  experience   in  that  field  serve  on  the  AOGCC   yet  this                                                            
Administration  has seen  fit to not  honor that.   HB 414 tries  to                                                            
ensure that  the Governor  appoints a geologist  and an engineer  of                                                            
knowledge.     The  third  Commissioner   could  be  of   any  other                                                            
profession.                                                                                                                     
                                                                                                                                
REPRESENTATIVE  GREEN  said the  reason HB  414 does  not require  a                                                            
registered  petroleum  engineer  is  because  when  this  issue  was                                                            
brought up last year, he  got flack from the Administration who said                                                            
the  pool  is too  small  -  there  are only  70  or  80  registered                                                            
petroleum  engineers  in the  entire  state.   To  accommodate  that                                                            
concern, the  bill was changed to  allow all petroleum engineers  to                                                            
qualify  because  a lot  of  companies  employ  people who  are  not                                                            
registered  in Alaska.  The companies  see no need for registration                                                             
in Alaska as  these people are registered  in other states  and they                                                            
can perform the work.                                                                                                           
                                                                                                                                
SENATOR MACKIE asked how many commissioners are on the AOGCC.                                                                   
                                                                                                                                
REPRESENTATIVE GREEN replied three.                                                                                             
                                                                                                                                
SENATOR MACKIE  asked if there are  specific qualifications  for the                                                            
other two.                                                                                                                      
                                                                                                                                
REPRESENTATIVE GREEN said  there are specific qualifications for the                                                            
geologist and  engineer but not for  the third member - the  statute                                                            
says the third member need not be expert in either field.                                                                       
                                                                                                                                
CHAIRMAN HALFORD  informed Representative  Green that all  testimony                                                            
was in opposition  to the bill, with  the exception of Mr.  Logan's.                                                            
                                                                                                                                
REPRESENTATIVE  GREEN  asked  if  those  testifying   gave  specific                                                            
reasons for their opposition.   He also asked if one group testified                                                            
that the engineer  should be a registered petroleum  engineer rather                                                            
than just a petroleum engineer.                                                                                                 
                                                                                                                                
CHAIRMAN  HALFORD  said  that was  one  group  but that  the  Alaska                                                            
Society of Professional  Engineers also opposes the  bill because of                                                            
the  non-registered   engineer  requirement.     He  noted  that  he                                                            
disagrees with  Representative Green on the appointment  question as                                                            
it applied  under existing law.    He thought the appointment  was a                                                            
good one and  that the person had  a lot of experience in  petroleum                                                            
engineering in a broader sense.                                                                                                 
                                                                                                                                
REPRESENTATIVE  GREEN said the problem is that the  AOGCC has no one                                                            
with down-hole experience.   That is why he thinks they set it up as                                                            
a petroleum engineer  because a petroleum engineer's  focus is down-                                                            
hole rather  than surface.  He explained  that down-hole  experience                                                            
has to do with the containment,  spacing, and reservoir mechanics of                                                            
actually  producing  the  oil  from that  reservoir  in  an  optimum                                                            
manner.                                                                                                                         
                                                                                                                                
CHAIRMAN  HALFORD noted that  Mr. Abbott  stated that the  geologist                                                            
vacancy  would  be  harder  to  fill  than  the petroleum   engineer                                                            
vacancy.                                                                                                                        
                                                                                                                                
REPRESENTATIVE  GREEN replied that  may be so, but the requirements                                                             
for a  geologist  in HB 414  are essentially  the same  as they  are                                                            
right now.                                                                                                                      
                                                                                                                                
SENATOR MACKIE asked how  many people are eligible for the geologist                                                            
position under HB 414.                                                                                                          
                                                                                                                                
REPRESENTATIVE GREEN said  the number is around 400 - it was 500 but                                                            
he assumes  the number has  decreased by about  20 percent  with the                                                            
last downsizing.   He added  that right now  there is a requirement                                                             
that the geologist be geologist certified.                                                                                      
                                                                                                                                
SENATOR  MACKIE questioned  what will  happen if  that pool  shrinks                                                            
even further.                                                                                                                   
                                                                                                                                
REPRESENTATIVE  GREEN replied that  pool is far larger than  that of                                                            
the medical  board or others.  The  possibility of shrinking  exists                                                            
but as  long as Alaska  is an oil  producing state,  it will  have a                                                            
plethora of engineers.   The AOGCC has always had applicants even in                                                            
the days when engineers were paid significantly higher wages.                                                                   
                                                                                                                                
Number 2175                                                                                                                     
                                                                                                                                
SENATOR LINCOLN  asked if the number of professional  geologists has                                                            
also decreased  due to the downsizing  so that there would  be fewer                                                            
than 12.                                                                                                                        
                                                                                                                                
REPRESENTATIVE GREEN said  he didn't know because his field has been                                                            
in  engineering.   He thought  that  in the  last  18 months,  while                                                            
downsizing  was  occurring,  a  significant  number  of exploration                                                             
geologists were  brought to Alaska with the now-defunct  ARCO.  ARCO                                                            
had shipped most  of their exploration geologists  to Texas and then                                                            
brought  them  back  because  their  budget  was  going  to  expand.                                                            
Phillips  has  indicated  that  it  will spend  in  excess  of  $400                                                            
million.                                                                                                                        
                                                                                                                                
SENATOR LINCOLN  asked Representative Green to respond  to the April                                                            
14 letter from the Alaska Society of Professional Engineers.                                                                    
                                                                                                                                
REPRESENTATIVE  GREEN replied, "Well originally, before  this bill -                                                            
its predecessor  had that they had  to be a registered engineer  and                                                            
we heard from  the Administration saying that they  couldn't support                                                            
that because there were  too few - there were something less than 70                                                            
registered  petroleum engineers, as  I say, of a field of  in excess                                                            
of 500,  because the  companies didn't  see a need  for that.   That                                                            
merely entitled  those engineers to  hire themselves out  to someone                                                            
else  as  a professional.    It  didn't  inhibit  the use  of  those                                                            
engineers for  engineering work that  the company felt was  adequate                                                            
to do  the  jobs that  they wanted  them to  do.   Being  registered                                                            
doesn't make you  a better engineer.  It just means  that you passed                                                            
the test and you  are willing to pay the annual dues.   That's why I                                                            
didn't become  registered here.  I was carrying these  registrations                                                            
from other states and began  to realize I'm spending an awful lot of                                                            
money here for no reason."                                                                                                      
                                                                                                                                
SENATOR  LINCOLN   asked  if  the  engineers  are   required  to  be                                                            
registered whether the pool would be reduced dramatically to 70.                                                                
                                                                                                                                
REPRESENTATIVE  GREEN  said very  much  so and  to comply  with  the                                                            
desire  to have a  broader base  to choose  from and  to offset  the                                                            
concerns brought  up by Senator Mackie,  the pool is enlarged  - not                                                            
the discounting  of the quality, just the discounting  of not having                                                            
to be registered.                                                                                                               
                                                                                                                                
CHAIRMAN HALFORD noted  that it is up to committee members to decide                                                            
what to do with CSHB 414 (O&G).                                                                                                 
                                                                                                                                
SENATOR  PETE  KELLY   moved  CSHB  414(O&G)  from  committee   with                                                            
individual recommendations  and its accompanying zero  fiscal notes.                                                            
There being no objection, the motion carried.                                                                                   
                                                                                                                                
               HB 206-FISH AND GAME LICENSES & TAGS                                                                         
                                                                                                                                
MR. JOHN MANLEY, legislative  aide to Representative Harris, sponsor                                                            
of HB 206, said  that Representative Harris introduced  this bill at                                                            
the request  of the  Alaska Department  of Fish  and Game (ADFG)  to                                                            
take care  of some housekeeping  measures needed  to clean  up their                                                            
statutes.  The bill changes  the word "waterfowl" to "migratory game                                                            
bird" in about six different  sections.  That change will bring into                                                            
the federal government's  migratory game bird reporting  program the                                                            
taking  of snipes  and  cranes.   This  will  give them  a  complete                                                            
picture of who is taking  what birds in the state.  Section 3 allows                                                            
disabled  veterans  and  $5  license  holders  to  register  in  the                                                            
national migratory game  bird harvest program by one of two methods.                                                            
 Because  these people  are not  required  to buy  duck stamps,  the                                                            
statute needed  another provision  to enable  them to register  into                                                            
the program.   Section 4  creates a new  combination seven  day non-                                                            
resident  hunting and  fishing license.   The $115  charge for  that                                                            
license costs  the same as  a seven day fishing  license and  a non-                                                            
resident  hunting license  but  it is more  convenient  to put  both                                                            
licenses  on one  piece of  paper.    The  bill also  sets fees  for                                                            
special  non-resident military  small  game licenses.   There  was a                                                            
glitch  when the price  of resident  hunting  licenses was  changed.                                                            
The cost of  a license for a non-resident  military person  would be                                                            
more than the  cost of a non-resident  license.  HB 206 straightens                                                             
that problem  out.  The  House Finance Committee  added a  provision                                                            
that  allows  Yukon  residents  to  obtain  a non-resident   fishing                                                            
license and a  non-resident king salmon tag at the  same rate that a                                                            
resident pays.   That provision was added at the request  of Senator                                                            
Phillips  and   it  will  not  go   into  effect  until   the  Yukon                                                            
reciprocates.                                                                                                                   
                                                                                                                                
CHAIRMAN  HALFORD said  when the Yukon  is willing  to give  600,000                                                            
Alaskans the same treatment,  Alaska will give their 35,000 people a                                                            
deal.                                                                                                                           
                                                                                                                                
MR. MANLEY continued  his explanation of HB 206.   Sections 9 and 10                                                            
replace  a   requirement  in  current   statute  that  sellers   and                                                            
purchasers  of licenses  must take  an oath.   That requirement  was                                                            
replaced  with a  notice that  will be  placed on  licenses  stating                                                            
there is a penalty for unsworn falsification.                                                                                   
                                                                                                                                
CHAIRMAN  HALFORD asked how  much a resident  sport fishing  license                                                            
costs.                                                                                                                          
                                                                                                                                
MR. MANLEY said it costs $15.                                                                                                   
                                                                                                                                
CHAIRMAN HALFORD  asked if the non-resident  military sport  fishing                                                            
license  will cost the  same.  He  also asked the  cost of the  non-                                                            
resident seven day sport fishing and hunting license.                                                                           
                                                                                                                                
MR. MANLEY said a non-resident  sport fishing license would cost $30                                                            
and the non-resident  hunting license costs $85 for  a total of $115                                                            
which is what  the combined license  would cost.  He explained  that                                                            
Sections 11 through  16 just add the word "registration"  in various                                                            
parts of the statutes  to comply with the change made  in Section 3.                                                            
The final change  will allow ADFG to issue replacement  licenses for                                                            
commercial fishing crew  members for $5.  ADFG is already doing that                                                            
but needs statutory authority.                                                                                                  
                                                                                                                                
MR. MANLEY noted that an  amendment to the bill was presented to him                                                            
today and  that it  is relatively  innocuous.   The amendment  would                                                            
read as follows.                                                                                                                
                                                                                                                                
     Page 2, line 16 after "birds" insert ", migratory game bird                                                                
     hunting,"                                                                                                                  
     After "and" insert "other"                                                                                                 
     After "public" delete "use" and insert "uses"                                                                              
                                                                                                                                
CHAIRMAN HALFORD  questioned whether the phrase, "other  public uses                                                            
of  migratory  game  birds"  covers  the  Alaska  Outdoor  Council's                                                            
concern.                                                                                                                        
                                                                                                                                
MR. MANLEY thought it would.                                                                                                    
                                                                                                                                
SENATOR LINCOLN  asked Mr. Manley how important the  amendment is to                                                            
the bill because it might slow the bill down considerably.                                                                      
                                                                                                                                
MR. MANLEY  said Representative Harris  did not have a problem  with                                                            
the amendment  but at the same time it is not critical  to the bill.                                                            
                                                                                                                                
CHAIRMAN  HALFORD  noted  the bill  has  a referral  to  the  Senate                                                            
Finance Committee.                                                                                                              
                                                                                                                                
MR.  DICK BISHOP,  Vice President  of  the Alaska  Outdoor  Council,                                                            
stated that  the Council supports  this bill.  ADFG and the  sponsor                                                            
did  a  good  job in  cleaning  up  some  of  the  loose  ends  with                                                            
licensing.   The Council  did suggest the  amendment in view  of the                                                            
fact that  the only place  in the bill, other  than the title,  that                                                            
hunting is  mentioned is in the price  tag.  The Council  felt it is                                                            
appropriate that some of  the benefits of the price tag that hunters                                                            
pay be  directed  to their  interests in  particular.   The  Council                                                            
would like to see the amendment as well as the bill pass.                                                                       
                                                                                                                                
SENATOR LINCOLN  asked Mr.  Bishop whether  he would rather  see the                                                            
bill amended  and take the chance  that it will slow the  bill down.                                                            
                                                                                                                                
MR. BISHOP  replied if the  bill was slowed  up enough to the  point                                                            
where it  cannot complete  the process, he  would be concerned.   He                                                            
repeated that  he would like to see  the amendment entered  into the                                                            
bill.                                                                                                                           
                                                                                                                                
SENATOR TAYLOR  moved the amendment  proposed by Mr. Manley.   There                                                            
being no objection, the motion carried.                                                                                         
                                                                                                                                
SENATOR  TAYLOR   moved  SCS  CSHB  206(RES)  from  committee   with                                                            
individual recommendations  and its accompanying fiscal note.  There                                                            
being no objection, the motion carried.                                                                                         
                                                                                                                                
There  being no  further  business  to come  before  the  committee,                                                            
CHAIRMAN HALFORD adjourned the meeting at 7:35 p.m.                                                                             

Document Name Date/Time Subjects