Legislature(2015 - 2016)BUTROVICH 205

02/23/2015 03:30 PM Senate RESOURCES

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Audio Topic
03:32:14 PM Start
03:32:35 PM Confirmation Hearings: Board of Game
03:58:52 PM SJR13
04:29:11 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ Confirmation of Governor's Appointees: TELECONFERENCED
Board of Game - Kip Fanning, Teresa Sager Albaugh
-- Public Testimony on Appointees --
-- Uniform Rule 23 Waived --
Moved CSSJR 13(RES) Out of Committee
-- Public Testimony --
Bills Previously Heard/Scheduled
          SJR 13-OCS OIL & GAS EXPLORATION/DEVELOPMENT                                                                      
3:58:52 PM                                                                                                                    
CHAIR  GIESSEL  announced  SJR  13 to  be  up  for  consideration                                                               
[version 29-LS047\H was before the committee].                                                                                  
SENATOR  COGHILL,   prime  sponsor   of  SJR  13,   Alaska  State                                                               
Legislature, Juneau, Alaska, said  he used the strongest language                                                               
he  could to  direct the  Bureau  of Ocean  Energy Management  to                                                               
"cease and  desist" from taking  the oil-rich Chukchi  Sea leases                                                               
off  the  market,  because  it is  mismanagement  of  the  energy                                                               
potential of America and Alaska.                                                                                                
4:01:40 PM                                                                                                                    
SENATOR  COGHILL  moved  to  adopt  CSSJR  13(RES),  version  20-                                                               
LS0471\E, as the  working document. There were  no objections and                                                               
it was so ordered.                                                                                                              
CHAD   HUTCHISON,  staff   to  Senator   Coghill,  Alaska   State                                                               
Legislature, Juneau,  Alaska, explained  that the changes  in the                                                               
proposed committee substitute  (CS) to SJR 13  came after further                                                               
conversations with Mike Pawlowski  in Senator Murkowski's Office.                                                               
The   resolution   was   designed  to   oppose   recent   federal                                                               
restrictions  relating to  the Chukchi  and Beaufort  Seas. There                                                               
are three big action points that distinguish this resolution:                                                                   
1.  They are  concerned about  future leases  in the  Chukchi and                                                               
Beaufort Seas.                                                                                                                  
2.  They  are  concerned  about active  leases  and  whether  oil                                                               
companies will have the ability to renew those active leases.                                                                   
3.   They  are   concerned   about  mitigation   as  it   relates                                                               
specifically to the  Hanna Shoal section of the  Chukchi Sea that                                                               
will  make it  cost prohibitive  for exploration,  production and                                                               
He  showed maps  depicting  historic and  active  oil leases  and                                                               
where activity is being restricted in 2017-2022.                                                                                
4:06:30 PM                                                                                                                    
He explained that the Chukchi Sea  is the important area that has                                                               
a  lot of  petroleum-related activity  going on,  particularly in                                                               
the  Hanna Shoal  area, because  at least  half of  it is  a high                                                               
petroleum area  with active historical  leases, Shell  and Repsol                                                               
being the  most important ones.  Shell has three  adjacent leases                                                               
and Repsol  has seven; another  five are immediately  adjacent to                                                               
that restricted area.  All of the leases  cover similar prospects                                                               
and  the concern  is that  the active  leases could  be affected,                                                               
because of the  uncertainty of their renewal.  Another concern is                                                               
that the cost  of mitigation efforts that will be  imposed in the                                                               
Hanna Shoal  area will be  so high  that the federal  agency will                                                               
manage it as wilderness, even though  it would be in violation of                                                               
SENATOR MICCICHE asked why Hanna Shoal was restricted.                                                                          
MR.  HUTCHISON answered  because  it  is a  high  value area  for                                                               
marine life.                                                                                                                    
SENATOR COSTELLO  asked what  the president is  using as  a basis                                                               
for his alleged authority.                                                                                                      
MR. HUTCHSON answered that he does  have the ability under the 43                                                               
USC 13.41(a) of the Outer  Continental Shelf (OCS) Lands Act that                                                               
says the  President of the  United States  may from time  to time                                                               
withdraw from disposition any of the unleased lands of the OCS.                                                                 
4:13:13 PM                                                                                                                    
CHAIR GIESSEL said  it seems like the excluded area  is almost an                                                               
ocean zoning step.                                                                                                              
MR. HUTCHISON said that many would agree with that analysis.                                                                    
SENATOR  STEDMAN commented  that they  should consider  combining                                                               
the timing  of this resolution  with the March report  coming out                                                               
from the National Petroleum Council.                                                                                            
SENATOR COGHILL said  that was an excellent  idea. It's important                                                               
to make  a live  communication, because silence  is acquiescence,                                                               
and "the shoes are dropping fast."                                                                                              
SENATOR  STEDMAN  suggested  deleting  "without  adequate  public                                                               
process" on page 3, line 30, to make the statement stronger.                                                                    
4:18:30 PM                                                                                                                    
SENATOR COGHILL  agreed with the goal,  but said there is  no way                                                               
this will get done without public process.                                                                                      
MR. HUTCHISON responded that the  initial draft of the resolution                                                               
did  not  have "without  adequate  public  process." That  was  a                                                               
recommendation from Senator Murkowski's Office.                                                                                 
SENATOR  STOLTZE said  he thought  it reads  much better  without                                                               
that language.                                                                                                                  
SENATOR COGHILL responded  that a resolution should  be as direct                                                               
as possible and he would like to take it out.                                                                                   
4:21:28 PM                                                                                                                    
SENATOR  COGHILL  moved  to delete  ",  without  adequate  public                                                               
process," on  page 3, line 30.  There were no objections  and the                                                               
amendment was adopted.                                                                                                          
4:22:04 PM                                                                                                                    
KARA MORIARTY, President and CEO,  Alaska Oil and Gas Association                                                               
(AOGA), said they support SJR 13.  She said the Arctic OCS is the                                                               
largest undeveloped  energy basin  in the  United States  and the                                                               
next  generation  of energy  security  for  the country  and  the                                                               
state.  She said  the  Arctic  OCS is  a  mega-resource, with  an                                                               
estimated 27 billion  barrels of oil and 132  tcf/natural gas. In                                                               
comparison, the  TransAlaska pipeline  System (TAPS)  has carried                                                               
just 17 billion  barrels of oil in 30-plus years.  So, truly, oil                                                               
and gas development  in the Beaufort and Chukchi  Seas could feed                                                               
into TAPS and maintain viability for years to come.                                                                             
Oil and gas development in the  OCS means more jobs for Alaskans.                                                               
It's predicted to  create an annual average of  35,000 direct and                                                               
indirect jobs over the next 50  years in Alaska, alone, and those                                                               
jobs would likely  represent a total payroll over  that time span                                                               
of $70 billion.                                                                                                                 
Since 1971, Ms.  Moriarty said 84 wells have been  drilled in the                                                               
Arctic  OCS,  all  without incident.  Industry  has  worked  with                                                               
communities  to incorporate  traditional knowledge  with decision                                                               
making,  establish  conflict  avoidance  agreements,  and  impose                                                               
seasonal drilling  limitations. New regulations and  research can                                                               
further ensure that development  and environmental protection can                                                               
She  said Mr.  Hutchison did  a  great job  of summarizing  their                                                               
concern with  the restrictions in  the current  five-year leasing                                                               
plan and the unknowns they bring up.                                                                                            
MS.  MORIARTY said  that as  the  sea-ice stays  open longer  and                                                               
other countries move forward with  exploration and development in                                                               
their waters,  and transportation through the  ice-free Northwest                                                               
Passage  increases, Alaska's  Arctic  seas will  be left  largely                                                               
unattended.  With  little  infrastructure in  place,  communities                                                               
along Alaska's northern  coast will be at the  greatest risk with                                                               
no  ability to  respond. So,  development of  the Arctic  OCS for                                                               
exploration   and    development   would   bring    that   needed                                                               
infrastructure  to a  very rural  on-shore  area. The  industry's                                                               
continued   presence   would   provide  security   and   response                                                               
capabilities, should they be needed.                                                                                            
CHAIR  GIESSEL,  finding  no   further  comments,  closed  public                                                               
SENATOR COGHILL  recapped that it  is time  to speak up.  A small                                                               
village  near Wainwright  was anticipating  how it  could support                                                               
that industry and  was happy that regulations  were structured to                                                               
around  their  best hunting  and  fishing  times. The  resolution                                                               
doesn't say don't  do anything, just that those leases  in an oil                                                               
rich area  should not  come under the  cloud that  this president                                                               
just put them under.                                                                                                            
CHAIR GIESSEL  said people at  Pt. Lay were also  looking forward                                                               
to the opportunities industry would bring.                                                                                      
SENATOR COSTELLO  moved to  report CSSJR  13(RES), version  E, as                                                               
amended,  from  committee  with  individual  recommendations  and                                                               
attached fiscal note(s). There were no objections and CSSJR
13(RES) was reported from the Senate Resources Standing                                                                         

Document Name Date/Time Subjects
SRES-Resume-Sager-Albaugh.pdf SRES 2/23/2015 3:30:00 PM
SJR 13 - Sponsor Statement 2 9 15.pdf SRES 2/23/2015 3:30:00 PM
SJR 13
SJR130Bill Ver E.pdf SRES 2/23/2015 3:30:00 PM
SJR 13
SJR 13 - Explanation of Changes 2 19 15.pdf SRES 2/23/2015 3:30:00 PM
SJR 13
SJR13 - Bill ver H.pdf SRES 2/23/2015 3:30:00 PM
SJR 13
SJR 13 Fiscal Note-Version E.pdf SRES 2/23/2015 3:30:00 PM
SJR 13
SJR13 - PowerPoint Presentation Revised 2 20 15.pdf SRES 2/23/2015 3:30:00 PM
SJR 13
SJR13 - Supporting Documents - BOEM - Beaufort OCS Oil and Gas Leasing Beaufort Sea 2 9 15.pdf SRES 2/23/2015 3:30:00 PM
SJR 13
SJR13 - Supporting Documents - BOEM - Beaufort Sea Analytical Considerations 2 9 15.pdf SRES 2/23/2015 3:30:00 PM
SJR 13
SJR13 - Supporting Documents - BOEM - Chukchi Area Analytical Considerations 2 9 15.pdf SRES 2/23/2015 3:30:00 PM
SJR 13
SJR13 - Supporting Documents - BOEM - Chukchi OCS Oil and Gas Leasing Chukchi Sea 2017-2022 Map 2 9 15.pdf SRES 2/23/2015 3:30:00 PM
SJR 13
SJR 13-Support Testimony-Kara Moriarty.pdf SRES 2/23/2015 3:30:00 PM
SJR 13
SRES-Resume-Kip Fanning.pdf SRES 2/23/2015 3:30:00 PM