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Home My WebLink AboutO 169Other Order 169 USGS Bonding Waiver 1. April 21, 2020 USGS Filed application for a Bond Waiver STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION 333 West 711 Avenue Anchorage Alaska 99501 Re: THE APPLICATION OF United States ) Other Order 169 Geological Survey for a Variance from ) Docket No: OTH-20-033 Bonding Requirements of the Alaska Oil ) and Gas Conservation Commission. ) April 27, 2020 DECISION AND ORDER The Alaska Oil and Gas Conservation Commission (AOGCC) has received a request from the United States Geological Survey (USGS) to waive the bonding requirements of 20 AAC 25.025 when USGS acts as operator of record to drill several research core holes on the North Slope. USGS states federal law prohibits USGS from agreeing to provisions requiring insurance coverage or indemnification unless specifically authorized by the United States Congress. Based on the status of the United States as a self-insured sovereign, a waiver of the bonding requirements contained in 20 AAC 25.025 is APPROVED. DONE at Anchorage, Alaska and dated April 27, 2020. Jeremy M. Price Jeremy M. Price Chair, Commissioner Daniel T. onninrs"—um.n. Seamount,Jr. °aM =0-017 11 2459�W Daniel T. Seamount, Jr Commissioner Jessie L. u9"ally nm°°yXi9eL cxmew,�a Chmielowski a,o'r`,�30NA03110-3ais Jessie L. Chmielowski Commissioner As provided in AS 31.05.080(a), within 20 days after written notice of the entry of this order or decision, or such further time as the AOGCC grants for good cause shown, a person affected by it may file with the AOGCC an application for reconsideration of the matter determined by it. If the notice was mailed, then the period of time shall be 23 days. An application for reconsideration must set out the respect in which the order or decision is believed to be erroneous. The AOGCC shall grant or refuse the application for reconsideration in whole or in part within 10 days after it is filed. Failure to act on it within 10 -days is a denial of reconsideration. If the AOGCC denies reconsideration, upon denial, this order or decision and the denial of reconsideration are FINAL and may be appealed to superior court. The appeal MUST be filed within 33 days after the date on which the AOGCC mails, OR 30 days if the AOGCC otherwise distributes, the order or decision denying reconsideration, UNLESS the denial is by inaction, in which case the appeal MUST be filed within 40 days after the date on which the application for reconsideration was filed. If the AOGCC grants an application for reconsideration, this order or decision does not become final. Rather, the order or decision on reconsideration will be the FINAL order or decision of the AOGCC, and it maybe appealed to superior court. That appeal MUST be filed within 33 days after the date on which the AOGCC mails, OR 30 days if the AOGCC otherwise distributes, the order or decision on reconsideration. In computing a period of time above, the date of the event or default after which the designated period begins to ran is not included in the period; the last day of the period is included, unless it falls on a weekend or state holiday, in which event the period runs until 5:00 p.m. on the next day that does not fall on a weekend or state holiday. Bernie Karl Gordon Severson Richard Wagner K&K Recycling Inc. 3201 Westmar Cir. P.O. Box 60868 P.O. Box 58055 Anchorage, AK 99508-4336 Fairbanks, AK 99706 Fairbanks, AK 99711 George Vaught, Jr. P.O. Box 13557 Denver, CO 80201-3557 Darwin Waldsmith P.O. Box 39309 Ninilchik, AK 99639 Colombie, Jody J (CED) From: Sent: To: Subject: Attachments: Please see attached. Colombie, Jody J (CED) Monday, April 27, 2020 1:29 PM Crawford, Steven M Other Order 169 Other169.pdf Jody J Colomhie Special Assistant Alaska Oil and Gas Conservation Commission 333 West 7' Avenue Anchorage, AK 99501 (907) 793-1221 Direct (907) 276-7542 Fax INDEXES Colombie, Jody J (CED) From: Crawford, Steven M <smcrawfo@usgs.gov> Sent: Tuesday, April 21, 2020 10:17 AM To: Colombie, Jody J (CED) Cc: Lepain, David L (DNR) Subject: Request to waive bonding requirements for USGS Attachments: IndemnificationRestrictionforUSGS.pdf Ms. Colombie, The USGS is formally requesting a waiver to the State of Alaska Oil and Gas Conservation Commisions bonding requirements. The USGS along with the State of Alaska plan to drill and core on the North Slope of Alaska. The USGS by federal law cannot procure bonds or any other type of insurance. We are required to refer bonding issues to the Federal Tort Claims Act. Please see the attached document. Thank you, Steve Steven M Crawford Supervisory Geologist Chief USGS Research Drilling Program 3595 E Patrick Lane 4100 Las Vegas Nevada 89120 Office 702-823-1235 Cell 702-858-8008 M REPLY REPER TO: U.S. Geological Survey California Water Science Center 4165 Spruance Road, Suite 200 San Diego CA 92101-0812 Office: (619) 225-6100 Fax: (619) 225-6101 http://co.water.usjzs.jzov LEGAL RESTRICTIONS ON INDEMNIFICATION AND INSURANCE PROVISIONS IN AGREEMENTS WITH THE U.S. GEOLOGICAL SURVEY The U.S. Geological Survey is unable, as a matter of Federal Law, to include two types of liability provisions in access agreements that many non-governmental entities are able to enter into for similar types of work: the U.S. Geological Survey may not agree to provisions requiring documentation of insurance coverage or indemnification. The U.S. Geological Survey is an agency of the United States Government. A Federal agency cannot execute an indemnification/hold harmless agreement unless specifically authorized by the U.S. Congress in a particular matter or case. A Federal agency may only expend public funds when authorized by the U.S. Congress through appropriations acts or other legislation. An agreement to indemnify or hold harmless is in essence an agreement to pay funds to cover another party's losses in the future and in an indefinite (and potentially unlimited) amount. As a result, reviewing courts have concluded that indemnification/hold harmless agreements are contracts or obligations to pay money before that money is appropriated by Congress. An agreement to pay public funds before money is appropriated by Congress is a violation of the Federal Anti -Deficiency Act, 31 U.S.C.§§ 13AI, 1350 and the Adequacy of Appropriations Act, 41 U.S.C. § 11. California Pacific Utilities Co. v. United States, 194 Ct. Cl. 703 (1971). Unless there is specific Congressional authorization for an indemnification/hold harmless; provision in a particular access agreement, the U.S. Geological Survey may not legally agree to provide such a provision. It is able, however, to enter into a substitute provision that provides similar protection while meeting the requirements of Federal law. This substitute provision is based on the Federal Tort Claims Act, 28 U.S.C. §2671 et seq. That Act provides for the payment of money damages for personal injuries or property damage caused by the negligence or wrongful act or omission of any employee of the United States while acting within the course of his or her employment. The language of this substitute provision follows: The U.S. Geological Survey agrees to cooperate, to the extent allowed by law, in the submission of claims pursuant to the Federal Tort Claims Act against the United States for personal injuries or property damage resulting from the negligent or wrongful act or omission of any employee of the United States while acting within the scope of his or her employment, arising out of this Agreement. The U.S. Geological Survey also is unable to provide documentation of insurance coverage. The United States is "self insured" and does not carry liability insurance; instead, the Federal government disposes of its liabilities under the Federal Tort Claims Act. Absent specific statutory authority, a Federal agency cannot purchase insurance. See, e.g. 19 Comp.Gen. 798. As a result, the United States cannot produce a certificate of insurance. However, the Federal government can and will dispose of all proper claims under the Federal Tort Claims Act.