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February 2008

Vol. 13, No. 5 Week of February 03, 2008

DNR commissioner turns down request for administrative law judge for Point Thomson hearing

The saying “if you give an inch, they’ll take a mile” takes on new meaning when reading the Jan. 18 letter sent to Alaska Department of Natural Resources Commissioner Tom Irwin by the main Point Thomson unit working interest owners, ExxonMobil, BP, Chevron and ConocoPhillips.

In the letter the Point Thomson companies’ attorneys ask Irwin to expand the scope of Superior Court Judge Sharon Gleason’s instructions in her December decision concerning the termination of Point Thomson, basically replacing the straightforward DNR administrative process with an adversarial trial process that includes replacing the presiding officer, Commissioner Irwin, with an independent administrative law judge, and re-examining all the issues heard in the recent Superior Court proceedings.

In her Dec. 26 decision, Gleason said DNR was justified in rejecting the owners’ latest plan of development for the eastern North Slope unit, and that DNR had the “authority to administratively terminate” Point Thomson.

But, she said, “rejection of a proposed plan of development does not result in automatic termination” under the unit agreement between the state and the working interest owners.

“Rather,” Gleason ruled, “a separate administrative determination as to the appropriate remedy is required” when a unit plan is deemed unacceptable. This is the right to due process, the judge said, noting the Point Thomson unit owners were deprived of due process by DNR.

The unit owners “were constitutionally entitled to a clear written notice that DNR was considering this remedy (termination) when it rejected the POD (plan of development), and should have been accorded the opportunity to be heard with respect to the appropriate remedy when the modified 22nd POD was rejected,” Gleason said.

So, the judge ordered DNR to give the Point Thomson unit owners a chance to argue what the appropriate remedy should be, and present an alternative option, under the state’s official administrative process.

That is what Irwin told the unit owners in a Jan. 28 letter, referring them to the legal procedure for DNR administrative proceedings “as described in 11 AAC 02.010 et. seq.”

He wrote, “Your requests for appointment of an independent hearing officer and an adversarial proceeding in which DNR is a party and its employees are subject to cross examination, are denied. You have demonstrated no circumstances to justify departing from the standard existing administrative process, a process that has been validated by the Alaska Supreme Court.”

But Irwin did extend deadlines set in his earlier, Jan. 3, letter, giving the owners until Feb. 19 (vs. Feb. 4) to “file joint or separate briefs describing the appropriate remedy” and “provide all documents” they want him to “consider in support of” their “proposed remedy,” including a list of witnesses they might wish to call.

Irwin set the hearing date for March 3. DNR must have its decision to Gleason by June 15.

Irwin said he would attend the hearing and make the decision, but that attorney Nan Thompson, head of the Division of Oil and Gas unit’s section, would act as the hearing officer.

The Point Thomson unit owners said if Irwin does not grant their request for the equivalent of a new trial under an independent administrative law judge, it would result in “a second appeal and a second remand.”

The state has been trying to get the undeveloped Point Thomson unit into production for more than 30 years.

—Kay Cashman






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