Bills aim to speed up permit process

Posted: Monday, March 03, 2003

As Gov. Frank Murkowski's administration actively seeks quicker returns from Alaska's resource wealth, state lawmakers of both parties are proposing bills designed to speed up the state's sluggish permitting process and remove perceived impediments to development.

Among these is House Bill 69, which concerns shallow natural gas or coal bed methane fields. It passed the House 37-0 on Feb. 12 and now sits in the Senate Resources Committee.

It would allow a designated member of the professional staff of the Alaska Oil and Gas Conservation Commission to approve variances from regulations without further commission review in cases where operations might be "unduly delayed."

Supporters say the move would help clear unnecessary hurdles to development, while critics worry important decisions would no longer be made at the commissioner level.

Under House Bill 69, the designated staffer could issue a variance to a commission regulation if its aim could be accomplished by "at least an equally effective means" as that called for in the regulation. Variances also could be issued by the designee if it was determined that a permittee's request "is more appropriate to the proposed operation than compliance with the regulation," or if it is determined the requirement is not necessary or ill-suited to the well or field under consideration.

Sen. Tom Wagoner, vice chair of the Senate Resources Committee, said he has been doing a lot of reading on coal bed methane wells because a Denver-based company, Evergreen Resources Inc., is drilling eight wells near Palmer in a pilot program to measure the efficacy of the drilling procedure here in Alaska.

Asked if the proposed amendments in House Bill 69 put important decisions on variances in too few hands, Wagoner said that particular issue had not yet been discussed in the committee.

However, he said it did concern him that important decisions might be made by staffers when perhaps they should be made by commissioners -- officials who had been tested by appointment hearings before lawmakers.

Rep. Mike Chenault, R-Nikiski, said he wasn't concerned that a professional staff member might make such important decisions, in part because they would presumably be versed in the details, and because they would have been empowered to do so by their bosses, the commissioners. He said the check and balance remained.

Rep. Vic Kohring, R-Wasilla, prime sponsor of House Bill 69, estimated it would speed up shallow-well applications from one or two years to 30 to 60 days.

"I see that it's going to encourage more operators to come to the state and apply for well permits and be issued those permits," he said. "It's going to result in more drilling, and it's going to be a shot in the arm economically to our state."

Bob Shavelson, director of Cook Inlet keeper, a Homer-based environmental watchdog agency, called the bill "a poster child for the stupid intersect between permit streamlining and the governor's habitat rollback."

"It essentially removes all permitting for this type of development, which has had horrible water-quality and fish-stream impacts in places like the Powder River Basin down south (in Wyoming).

"There aren't even any rules to deal with coal bed development," he said. "But we want to put gaping holes in what oversight we have. If this is going to be the pattern for this state, we are certainly getting off on the wrong foot by leaving all substantive decisions to industry. In our haste to meet the governor's call for immediate returns on our oil wealth, we are tossing the baby out with the bath water."

An oft-stated mantra of those who urge an easing of Alaska's permit procedures is that state regulations unnecessarily delay resource development.

Mark Sexton, president and CEO of Evergreen Resources Inc. told the House Special Committee on Oil and Gas that Colorado permits such wells much quicker than Alaska.

"We are puzzled by statements by him and others that it takes them one to two years to get a permit," said Commissioner Daniel Seamount Jr.

Several permits Evergreen needed were approved in just two weeks late last summer. If there were any delays, they weren't caused by the commission, Seamount said.

Sexton said Wednesday that his complaint wasn't with the commission, but with the amount of information Alaska regulations require they supply, much of which was unnecessary because it did not apply to shallow gas wells.

"Once the commission had all the information, they were very responsive, but it took us months to prepare all this information. It was not as simple as in other states. The bottleneck has to do with the entire process," he said. "We destroyed a lot of trees in all the paperwork."

Another permit bill is House Bill 86, a one-paragraph amendment that would limit the grounds for challenging permits after those permits have been issued. If adopted, the provision would require that post-permit challenges be based on pertinent new scientific information or newly recognized local traditional knowledge.

Rep. Hugh Fate, R-Fairbanks, sponsored the bill. Jim Pound, Fate's chief of staff, said it was a lawsuit over Golden Valley Electric Association's Northern Intertie project that prompted the bill. Pound said it would eliminate many so-called nuisance lawsuits.

The amendment would extend to any kind of development permit, including oil and gas.

House Minority Leader Rep. Ethan Berkowitz, D-Anchorage, said the bill "seems legally suspect."

"Horrendous," Shavelson said, adding that he doesn't think sponsors realize how this could handcuff various state agencies, including the Alaska Oil and Gas Conservation Commission, which has a mandate to seek injunctions against projects that waste oil and gas resources.

Shavelson said he doesn't know if the central aim of the bill is to stop lawsuits, nuisance or otherwise, but he said it was poorly drafted. The Legislature has made it policy that oil and gas resources not be wasted. This bill runs counter to that policy, he said.

Shavelson, a lawyer, said the judicial standard for issuing injunctions to stop projects is extremely tough to meet. House Bill 86 as much as tells the judicial branch it isn't fit to make those decisions, he said.

Chenault said he wasn't sure exactly what "new local traditional knowledge" actually meant, but he said he saw HB 86 as a way to streamline the process and stop frivolous lawsuits, which he said have been used to delay projects on the thinnest of grounds.

As to whether the language was broad enough to preclude essential activities of the oil and gas conservation commission, Chenault said the bill would get a hearing by the House Judiciary Committee.

"That might be a good place to pose those questions," he said.

House Bill 78, proposed by Rep. Beth Kerttula, D-Juneau, and other Democrats, would establish a permit application clearinghouse in the office of the governor. The clearinghouse would handle applications on a unified permit application form, ensure that the applications were complete, and then forward copies to the various resource agencies concerned -- the departments of Environmental Conservation, Fish and Game, and Natural Resources -- for their review. Those agencies would be required to conduct unified public hearings wherever possible to further accelerate permit handling.

Chenault said he was personally "shopping this one out" to industry experts to garner their take on its ramifications. On its surface, however, Chenault said it had good possibilities.

"I agree with anything that speeds up the process that still takes into consideration environmental protections in areas that are affected," he said.

A call to Rep. Kelly Wolf's office seeking comment on the three House bills was not returned.

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