April 13, 1999 --- Vol. 5, No. 19April 1999

Senate Resources passes out bill to change funding for AOGCC

Senate Resources passed out Senate Bill 134 on April 12. The bill would change the funding basis for the Alaska Oil and Gas Conservation Commission, eliminating the present oil and gas conservation tax and substituting a stable funding source.

The present conservation tax is based on production and unfortunately, commission Chairman Bob Christenson told the committee, the number of wells - the basis of the commission's work load - is increasing while production is decreasing, resulting in a situation where fewer employees have more work to do.

That, said Sen. Drue Pearce, R-Anchorage, is the reason she introduced Senate Bill 134, which would base funding for the commission on the number of operating wells. The bill also allows the commission to allocate expenses of investigation and hearing among the parties.

What about this year?

Christenson said the commission is "in dire straits for this year and our roof just started leaking." It doesn't have enough money to pay all employees through the end of the fiscal year, so on June 4 the commissioners, three professionals and four inspectors will go on leave without pay until the end of the month. The agency will receive production reports and do data gathering, Christenson said, but no new work will be performed from June 4 to July 1.

The commission is in a state-owned building that has had no maintenance money in its budget for a number of years. The roof has started to leak, Christenson said, and the Department of Transportation and Public Facilities "has elected not to do anything about it."

AOGCC-APUC merger proposed

On April 12 the Senate Resources Committee heard from Sen. Drue Pearce, R-Anchorage, on her proposal to combine the Alaska Oil and Gas Conservation Commission and the Alaska Public Utilities Commission. The committee also took public comment on the proposal, Senate Bill 133, and held it over for more work.

The bill would eliminate the existing commissions, merge their responsibilities and continue their current regulations and proceedings under a seven-member Alaska Energy Conservation Commission. Pearce told the committee that the new commission wouldn't necessarily cost less, but would provide more oil and gas support, improve the APUC with a time management system and speed up APUC hearings with three-member panels and a second hearing officer.

Refuse regulation would drop from the responsibilities of the new commission, which drew protest from two small refuse companies. Representatives of the electric utility and telecommunications industries said they also had concerns about the combination because the loss of institutional memory from present commissioners and uncertainties about how the new commission would work.

Governor's merger team finds six areas of serious concern

Gov. Tony Knowles said April 12 that the administration team examining the proposed acquisition of ARCO by BP Amoco has "identified six areas of serious concern where the state will be examining the proposed merger."

Knowles also said that the team will meet with officials of the Federal Trade Commission April 19 in Juneau to provide the federal agency with jurisdiction over the merger the full benefit of state information and concerns.

The six areas of concern identified are: value of North Slope oil; marine transportation; operation of the trans-Alaska oil pipeline; development of other North Slope facilities and fields; natural gas development; and leasing of acreage for oil and gas development.

Knowles said the cabinet-level team will hire international experts in two areas: the behaviors of new multi-national oil companies and in anti-trust matters.

Petroleum News - Phone: 1-907 522-9469 - Fax: 1-907 522-9583
[email protected] ---