Frank H. Murkowski
GOVERNOR 
 STATE OF ALASKA
OFFICE OF THE GOVERNOR
JUNEAU
October 06, 2006


Please see Administrative Order 234 which overrides AO229.



ADMINISTRATIVE ORDER NO. 229



I, Frank H. Murkowski, Governor of the State of Alaska, under the authority of art. III, secs. 1 and 24, of the Alaska Constitution, and AS 44.17.060, name the commissioner of the Department of Natural Resources, through the commissioner's designee, the Lease Monitoring and Engineering Integrity Coordinator, as the coordinator of state permits, authorizations, and oversight of oil and gas leases designed to produce oil and natural gas from State of Alaska land. This Order covers the permitting, authorization, and increased oversight activities on all state oil and gas leases by the departments of Natural Resources, Environmental Conservation, Fish and Game, Transportation and Public Facilities, Labor and Workforce Development, and Public Safety (Designated Agencies). This Order may be amended to cover the permitting, authorization, and oversight activities of other state agencies in the future as necessary and directed by future administrative orders of the governor. This Order outlines the processes and responsibilities of the Designated Agencies with regard to state permitting, authorization, and oversight activities on all state oil and gas leases.

Nothing in this Order affects the authorities or responsibilities of state agencies that do not involve permitting, authorization, and oversight activities on state oil and gas leases, including advocacy by the Department of Law before the Federal Energy Regulatory Commission and state regulatory commissions, or the development of fiscal terms by the Department of Revenue under AS 43.82.


FINDINGS
    1. It is in the best interests of the people of Alaska and the nation that oil and gas production and transportation facilities be designed, constructed, and operated in a safe and environmentally sound manner. Oversight of oil and gas activities by state agencies with legal jurisdiction must be efficient, effective, and capable of ensuring compliance with state law.

    2. It is in the best interests of the people of Alaska and the nation that Alaska's oil and gas resources be expeditiously produced in a manner that makes the maximum contribution to the development and standard of living of the residents of our state.

    3. It is desirable that the State of Alaska have a unified voice representing its interests in dealings with federal agencies, oil and gas producers, pipeline companies, and contractors related to permitting, authorization, and oversight of oil and gas lease operations. It is also desirable that the state have a single point of contact for permits, authorizations, and oversight of oil and gas lease operations to ensure coordination among local, state, and federal authorizing agencies and, if appropriate, to develop substantially similar terms and conditions for operations on oil and gas leases.

    4. Permitting, authorization, and oversight of oil and gas lease operations involve many state agencies. A coordinated state approval and oversight process for lease production operations that provides for internal alignment and dispute resolution is necessary. Internal alignment fosters efficiency in state permitting, authorization, and oversight functions.

    5. It is in the best interests of the people of Alaska to utilize existing government structures and processes to the maximum extent possible, optimize oil and gas production expertise and performance, and minimize impacts to ongoing functions of government. The Lease Monitoring and Engineering Integrity Coordinator's Office in the Department of Natural Resources (LMEICO) is the appropriate lead and single point of contact for the permitting, authorization, and oversight of oil and gas production from state land.

ORDER
To further these findings, I, Frank H. Murkowski, Governor of the State of Alaska, order and declare the following:

    1. A Lease Monitoring and Engineering Integrity Coordination Cabinet is established, comprised of the commissioners of the Departments of Natural Resources, Environmental Conservation, Fish and Game, Public Safety, Revenue, Transportation and Public Facilities, and Labor and Workforce Development; the Governor's Office Washington, D.C. Director; and the attorney general. The commissioner of the Department of Natural Resources will chair the Lease Monitoring and Engineering Integrity Coordination Cabinet.

    2. The Lease Monitoring and Engineering Integrity Coordination Cabinet shall seek to ensure that the best available technology and operating practices are used for the production and transportation of Alaska's oil and gas resources.

    3. The commissioner of the Department of Natural Resources, through the Lease Monitoring and Engineering Integrity Coordinator (LMEIC), is the lead official for state communication and coordination with appropriate federal agencies related to permitting, authorization, and oversight of oil and gas production from state leases.

    4. The LMEIC shall seek to enter into Memoranda of Understanding with federal agencies having jurisdiction in order to coordinate permitting, inspection, and compliance activities in a manner similar to the functions performed by the Federal-State Joint Pipeline office.

    5. The LMEIC is the lead official for coordinating state permitting, authorization, and oversight by Designated Agencies related to oil and gas production from state leases. The LMEIC shall establish and maintain a Lease Monitoring Group within the Division of Oil and Gas to coordinate actions by Designated Agencies related to oil and gas production from state leases.

    6. Each Designated Agency shall appoint a liaison officer who will report directly to the head of the Designated Agency and be assigned to the Lease Monitoring Group. Liaison officers shall serve as a single point of contact representing their Designated Agencies in matters relating to permitting, authorization, and oversight of oil and gas production from state leases. Liaison officers shall represent their agencies in matters relating to the processing of their respective Designated Agency permits and authorizations affecting oil and gas production. Each liaison officer shall keep the LMEIC informed of permits and authorizations that the officer's agency plans to issue for oil and gas production activities, and of scheduled oversight activities to ensure compliance with the Designated Agency's authorities.

    7. Liaison officers shall be available to manage and perform work necessary to process permits and authorizations for oil and gas production from state leases by their Designated Agency; assist as necessary with permits and authorizations by other Designated Agencies; manage and perform work necessary to oversee oil and gas operations; and provide other necessary technical assistance to the LMEIC in their areas of expertise.

    8. Staff hired by individual Designated Agencies for work associated with the LMEICO is under the supervision of the liaison officer for the Designated Agency. Staff providing support from a Designated Agency's regional or central office will continue to work for their supervisor in the Designated Agency.

    9. Liaison officers shall manage their Designated Agency's administrative functions that are directly related to their agency's participation in the Lease Monitoring Group, including maintaining agency files. Each Designated Agency shall keep a full set of files at the office of the Lease Monitoring Group on all aspects of its activities related to oil and gas production from state leases.

    10. Liaison officers shall provide copies of all applications and requests for permits and authorizations related to oil and gas production from state leases to the LMEIC. Each liaison officer shall coordinate with the LMEIC public notices and other legally required public hearing processes related to their agency's activities related to oil and gas production from state leases. All permits and authorizations issued by Designated Agencies related to oil and gas production from state leases shall, to the maximum extent practicable, be processed in the LMEICO. Liaison officers shall provide copies of proposed permits and authorizations to the LMEIC for review and comment, and shall provide copies of permits and authorizations issued.

    11. Each liaison officer shall, to the extent allowed by law and whenever feasible, consult with the LMEIC and consider the LMEIC's advice before the officer's Designated Agency takes an enforcement action related to oil and gas production from state leases. This provision does not limit Designated Agencies' enforcement authorities or the exercise of those authorities.

    12. Between the effective date of this Order and the date of approval by the governor of a permanent funding mechanism, all Designated Agency funding requests associated with permitting, authorization, and oversight activities on all state oil and gas leases shall be handled through the budget process authorized by AS 37.07.

    13. In order to develop a consolidated budget request, all Designated Agencies shall prepare and submit to the LMEIC an annual budget request for all appropriations, and permitting fees identified in statute or regulation, associated with oil and gas production from state leases. After review and consultation with the LEMIC, the budget requests will be consolidated and submitted by the Department of Natural Resources through the budget review process. Oil and gas production permitting, authorization, and oversight activities by Designated Agencies may not be budgeted in the Executive Budget submitted to the Legislature except through this process. Upon approval of the budget, and appropriation by the Legislature, the LMEIC shall enter into reimbursable services agreements with Designated Agencies to cover the approved costs associated with oil and gas production activities and shall ensure that reimbursement is secured promptly for costs incurred under approved appropriations.

    14. In the event of a dispute between Designated Agencies regarding a matter covered under this Order, including matters involving annual appropriation requests, each affected liaison officer and the LMEIC will resolve the dispute to the maximum extent possible. If the dispute cannot be resolved between each affected liaison officer and the LMEIC, the matter will be resolved by the affected agency heads and the commissioner of the Department of Natural Resources. If the dispute cannot be resolved by the affected agency heads and the commissioner of the Department of Natural Resources, the matter will be resolved by the governor, after considering any recommendations of the Lease Monitoring and Engineering Integrity Coordination Cabinet.

    15. Unless contrary to any dispute resolution process in statute or regulation, in the event of a dispute between Designated Agencies involving a matter subject to the Designated Agencies' statutory or regulatory authority, each affected liaison officer and the LMEIC will resolve the dispute to the maximum extent possible. If the dispute cannot be resolved by the affected liaison officer and the LMEIC, the matter will be resolved by the affected agency heads. If the dispute cannot be resolved by the agency heads, the matter may be considered by the governor, after consideration of any recommendations of the Lease Monitoring and Engineering Integrity Coordination Cabinet. The decision of the head of the Designated Agency responsible for administering the statute or regulation in question is final. In all such disputes, the head of the Designated Agency responsible for administering the statute or regulation shall seek and consider the views of other affected agency heads before making a decision.

    16. Consistent with AS 44.23.020, the attorney general, as legal advisor for the State of Alaska, shall provide legal services to the Lease Monitoring Group and all Designated Agencies within the Group.

    17. This Order is for administrative purposes only. It does not create any third-party rights nor modify the statutory and regulatory authorities of Designated Agencies.

    18. The LMEIC will submit to the governor and the Lease Monitoring and Engineering Integrity Coordination Cabinet periodic progress reports that summarize goals and objectives and accomplishments against those goals and objectives.

This Order supplements Administrative Orders 134 and 187 and shall be interpreted complementary with those Orders. Unless contrary to any dispute resolution process in statute or regulation, any conflict among those Orders shall be resolved by the heads of the affected state agencies; if disagreement remains, the governor will resolve the conflict.

This Order takes effect immediately.

DATED at Juneau, Alaska, this 6th day of October, 2006 
 
 

/s/Frank H. Murkowski
Governor


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