Walker presses court challenge, says Point Thomson deal was improper
Bill Walker, an announced candidate for governor in 2014, is continuing his court challenge of the state’s landmark Point Thomson settlement.
Point Thomson is a rich oil and gas field on Alaska’s eastern North Slope. In March 2012, the state and oil companies holding leases at Point Thomson struck a deal resolving years of legal conflict over the field, and laying out a schedule for its long-awaited development.
The settlement was a major policy objective for Gov. Sean Parnell, who sought to spur production from Point Thomson, and also boost chances for a North Slope natural gas pipeline.
The field holds an estimated 8 trillion cubic feet of gas, or about a quarter of the known reserves on the North Slope, plus large volumes of crude oil and other petroleum liquids.
Walker, however, argues the Point Thomson settlement is a bad deal for the state, and that the Parnell administration took unlawful shortcuts in signing it.
The matter now is pending before the Alaska Supreme Court, where Walker is appealing his loss in a lower court.
Second run for governorOn April 25, Walker announced he will challenge Parnell in the 2014 Republican primary.
The Anchorage attorney and former mayor of Valdez took on Parnell in the 2010 primary, coming in second with about 33 percent of the vote. Parnell took 50 percent and Ralph Samuels tallied 14 percent.
In announcing again for governor, Walker said the state “lacks strong leadership, vision and a roadmap for our state’s future.”
Alaska, he said, has become a state “whereby the major North Slope oil companies now dictate our tax and resource development policy.” He cited a tax bill Parnell pushed through the Legislature this year that “returns billions of dollars each year to the major oil companies without any corresponding requirement that any of that money be spent in Alaska.”
Walker long has been an advocate for a gas pipeline, and for development of Point Thomson.
But he contends the Parnell administration’s settlement with field operator ExxonMobil and its partners was improper, skirting the normal public process and leaving the oil companies with too much control over the field.
‘Citizen taxpayer’The March 29, 2012, settlement between the state and ExxonMobil, BP and ConocoPhillips ended a seven-year fight for control of the undeveloped Point Thomson field.
The Parnell administration says the deal contains strong terms that will drive the companies to either produce from the field or suffer costly consequences, including the loss of leased state acreage.
ExxonMobil is now working on the early stages of an initial development at Point Thomson. The project will involve producing a modest 10,000 barrels per day of natural gas condensate, with field startup scheduled for spring 2016.
Acting as a “citizen taxpayer,” Walker on May 29, 2012, filed an “administrative appeal” in state Superior Court in Anchorage challenging the Point Thomson settlement, as signed by Dan Sullivan, commissioner of the Department of Natural Resources, and Attorney General Michael Geraghty.
The state moved to have Walker’s lawsuit thrown out, and Judge Catherine Easter granted the motion on Dec. 7, 2012.
Easter, however, didn’t rule on the substance of Walker’s arguments. Rather, she ruled that her court lacked jurisdiction over his administrative appeal. She held that Geraghty had discretion to enter into the Point Thomson settlement, and that Sullivan’s signature on the deal was “not an appealable decision.”
On to the high courtOn Jan. 9, Walker appealed Easter’s decision to the Alaska Supreme Court. Walker argues Easter should have kept the case and let it play out.
Walker’s opening brief discusses his numerous problems with the Point Thomson settlement.
“The sweeping scope and economic significance of the Point Thomson Settlement Agreement to the people of Alaska is truly unique,” says the brief, signed by Walker’s law partner, Craig Richards.
In general, Walker says, the settlement is not in the best interests of the state or its citizens.
Walker argues the agreement was “negotiated and executed in secret,” with no opportunity for the public or Legislature to review or object to its terms.
Walker further contends the agreement contains “no firm work commitments” for ExxonMobil and the other working interest owners in the field.
And he says the Parnell administration circumvented the normal procedures, or “checks and balances,” that should apply to many terms in the Point Thomson settlement.
Walker also argues the settlement contains provisions that illegally “contract around” DNR regulations governing the management of oil and gas units.
The state’s argument has been that the attorney general has “broad authority” to settle litigation, and the Point Thomson settlement isn’t subject to challenge.