1. (a) If the department receives competing proposals from qualified applicants and the written finding of the commissioner concludes that a carbon storage exploration license should be issued, the commissioner will issue an invitation to each qualified applicant to submit a sealed bid on a form supplied by the department. The invitation to bid will

   1. (1) be issued concurrent with the written finding;
   2. (2) describe the area offered for licensing;
   3. (3) designate the date a sealed bid must be received by the commissioner;
   4. (4) include the finding under AS 38.05.710(c) and 11 AAC 84.1015, the exploration license and lease forms that will be used, and a bid form;
   5. (5) specify the terms and conditions of bidding and sale, including any bid deposit if required by the commissioner;
   6. (6) specify the bid variable as described in (g) of this section; and
   7. (7) disclose additional information and set out additional requirements as the commissioner determines to be necessary.
2. (b) The commissioner will notify each applicant of the commissioner's decision to accept or reject that applicant's sealed bid.
3. (c) After the bidding period closes, if a lessee that was granted a right to match a winning bid under AS 38.05.710(g) submitted a bid but was not the successful bidder, the commissioner will provide the lessee the terms of the successful bid and provide the lessee 30 days to affirm in writing whether the lessee will match the successful bid. If the lessee declines to match the terms of the successful bid or fails to respond within 30 days, the commissioner will award the exploration license to the highest bidder.
4. (d) The successful bidder shall wire transfer the first-year license fee, submit two executed copies of the exploration license form, and file any required security with the department not later than 30 days after receiving notification of the award.
5. (e) If a successful bidder fails to comply with (d) of this section, any bid deposit and the license award is forfeited. The commissioner may award the exploration license to the next successive highest bidder.
6. (f) If the commissioner requires a bid deposit, the bid deposit will be held until a license is awarded or until the commissioner decides not to award the license.
7. (g) The commissioner will choose a bid variable, which may consist of a cash bonus, injection charge, minimum guaranteed annual payment, share of gross revenues, or other bid variable in order to assess competing proposals. The best interest finding under 11 AAC 84.1015 will contain the rationale for the selected bid variable.

(Eff. 2/16/2025, Register 253)

Authority: AS 38.05.035, AS 38.05.700, AS 38.05.860, AS 38.05.135, AS 38.05.710, AS 38.05.945