Copyright 1999 Federal News Service, Inc.
Federal News Service
JANUARY 27, 1999, WEDNESDAY
SECTION: IN THE NEWS
LENGTH:
1164 words
HEADLINE: PREPARED TESTIMONY OF
JIM
WHITAKER
STATE REPRESENTATIVE
FOR
ALASKA STATE
SENATE PRESIDENT DRUE PEARCE AND
ALASKA STATE
HOUSE SPEAKER BRIAN PORTER
BEFORE THE
SENATE ENERGY AND NATURAL RESOURCES COMMITTEE
SUBJECT -
IMPACTS OF OFFSHORE ACTIVITIES JANUARY 27, 1999
BODY:
Good Morning, Mr. Chairman and members of the Committee. My name is Jim
Whitaker and am here testifying today on behalf of State Senate President Drue
Pearce and the Alaska State Senate and Alaska State House Speaker Brian Porter
and the Alaska State House. I am a member of the Alaska State House from
Fairbanks, Alaska and serve as Chairman of the Oil and Gas Committee.
I am
here today to talk about the impacts of offshore oil and gas development
activities on Alaska and its coastal communities. I want to begin, however, by
expressing my appreciation to Chairman Murkowski, Senator Landrieu and the other
co-sponsors of S. 25, the Conservation and Reinvestment Act of
1999. This legislation is a much- needed and appropriate step towards addressing
the impacts, needs and inequities we are discussing today. For the last three
decades Alaska has been one of the primary sources of this country's domestic
energy supply. It is no secret that the oil and gas industry has brought many
benefits to Alaska. At the same time, however, it has also created
responsibilities and burdens which have economic costs throughout the State. I
can tell you that my own hometown of Fairbanks experiences many very real
economic, environmental and community impacts as a result of the oil and gas
activities which take place further north and from the Trans Alaska Pipeline
System. Fortunately, we have also been able to benefit from them as well and to
rely upon those benefits, to some extent, to deal with such impacts and
responsibilities.
Alaska is also one of the several states which has active
federal outer continental shelf (OCS) oil and gas development taking place off
its shores. More importantly, the level of production from federal OCS oil and
gas leases in Alaska is likely to increase significantly as new development is
brought on line. Hundreds of millions of dollars in revenues will be produced
from federal OCS development in Alaska. Yet unlike federal onshore activities,
Alaska and the individual communities which are most proximate to federal OCS
development will receive no direct benefits from it even while we shoulder the
burdens and responsibilities that arise from development.
As in the case of
onshore development, federal OCS activities are major industrial undertakings
which inevitably impact the State and particularly the communities nearest to
them. Federal OCS oil and gas activities place increased demands on
infrastructure, such as roads, ports, airports and not just those in the
immediate vicinity. Anchorage, our largest city, which is itself a coastal
community, feels such effects from activities all over the state. In Alaska,
much OSC-related equipment and facilities must come through the Port of
Anchorage whether it is destined for the nearby waters of Cook Inlet or those
much further north. The Anchorage and Fairbanks airports both experience
significantly higher traffic, both cargo and passenger, as a direct result of
onshore development, and offshore activities will bring further increases.
Federal OCS activities also place increased demands on local public services,
such as fire protection, search and rescue, and law enforcement, as well as the
utility systems, of nearby communities, such as Barrow, Kaktovik, Kodiak and
around Cook Inlet. Equally important are the increased environmental monitory
and regulatory functions that must be performed by the State and local
governments. All of these impacts have economic costs for the State and for our
local communities. Under the current federal system, however, we derive no
direct economic benefits from federal OCS oil and gas development to assist us
in dealing with the impacts which these same activities create.
Not only is
this unfair, it is also at odds with the historical practice and policy in the
United States of allowing affected states and communities to share in the
benefits of the development of federally-owned resources. The Alaska Statehood
Act and, in other states, the Mineral Leasing Act, provide that we are entitled
to receive a significant portion of the revenues derived from federal oil and
gas leases on lands within our boundaries. This policy exists both as a matter
of fairness and in recognition of the very real impacts which such activities
create. Similarly, the federal payments in lieu of taxes or PILT program seeks
to account for the economic impacts of federal lands on the local tax base. But
the rules suddenly and inexplicably change when those very same federal
activities occur right off our shores. That, I believe you'll agree, is simply
not right and makes no sense.
Nevertheless, this is not simply a matter of
sharing the wealth, but also about addressing very real needs. Many of the
smaller coastal communities in Alaska are struggling under what can best be
described as third world conditions. Most are still trying to address basic
community needs like education and water and sewer service. Many of the
residents in these villages exist below the poverty line and are forced to rely
on subsistence activities for survival. I have included as an exhibit to my
written testimony a chart with income and poverty information for some of our
coastal communities. The social and cultural problems that accompany poverty are
often rampant. Money will not solve all of these problems. But providing some
form of OCS community impact assistance will help improve the quality of life
for such communities and their residents.
Allowing Alaska and other coastal
states to share in the economic benefits of federal OCS development will also
assist us in addressing other important needs and functions. As a coastal state,
Alaska has an extensive Coastal Zone Management Plan and Program which is
concerned not just with OCS oil and gas activities but all activities which
impact the coastal environment. Federal OCS revenues would better enable Alaska
and its communities to implement adequate monitoring and planning programs. The
monitoring and collection of data regarding marine species and habitat could be
significantly expanded. Local communities would be able to participate more
fully and address their concerns in the extensive federal and State
environmental planning process which precedes OCS development.
In closing
let me emphasize that the Legislature and the citizens of Alaska overwhelmingly
support responsible OCS development. Alaska has been blessed with a wealth of
natural resources and their development is a crucial element of our economy. At
the same time, however, it is important that the United States recognize the
necessity and equity of allowing Alaska and other coastal states to share
directly in the benefits of the development OCS resources so as to better enable
then to deal with the very real impacts and responsibilities which they create.
Thank you again Mr. Chairman for the opportunity to appear here and express
the Legislature's concern on this very important matter.
END
LOAD-DATE: February 3, 1999 
