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Senate Resources passes out bill to change funding for AOGCC Commission chairman says agency will be out of money in June; professional staff will take leave without pay
Kristen Nelson PNA News Editor
The Alaska oil and gas conservation tax, the basis for funding for the Alaska Oil and Gas Conservation Commission, is a tax on production in the state. That, and some charges for inspections, provide funds which the state then allocates back to the commission.
Unfortunately, as commission Chairman Bob Christenson told the Senate Resources Committee April 12, 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 provide a stable basis of funding for the commission. Funding for the commission would be based on operating wells; the bill also allows the commission to allocate expenses of investigation and hearing “among the parties, including the commission, as is just under the circumstances.” Regulated well regulatory cost charge Under the proposed legislation the cost of operating the commission would be divided among oil and gas producers according to volume.
Operators of wells “from which oil or gas is produced or into which oil, gas, water or other fluids, including waste slurry, are injected” would pay an annual regulatory charge to the commission. The commission would determine annually the amount for each operator “based on the percentage of the total volume during the same year of all wells for which permits to drill have been issued…” Volume is “the sum of all oil, gas or water produced from wells, and oil, gas, water and other fluids, including waste slurry, injected into wells.” For volume purposes, 6,000 cubic feet of injected gas has a volume equivalent of one barrel of oil.
The commission will administer the collection of the regulatory cost charge. What about this year? Commission chairman Christenson told the committee that the agency is “in dire straits for this year and our roof just started leaking.” The commission doesn’t have enough money to pay all of its employees through the end of the fiscal year, so starting the first of June its inspection team will stop working overtime and 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.”
Funding bill moved The committee voted to move the funding bill, but said it will do more work on a second bill introduced by Pearce, Senate Bill 133, which would merge the AOGCC and the Alaska Public Utilities Commission into a single new commission, impose a time management system and remove refuse collection from state utility control.
Small refuse collectors opposed removal of state controls and representatives of the electric utility and telecommunications industries said that they saw some advantages to changes at the utilities commission but were concerned about losing the institutional memory of the present commissioners and about the possibility that changes at the commission could result in an even slower system.
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