The Alaska Department of Natural Resources is asking the state Supreme Court to overturn a lower court ruling the agency says has potential to delay oil and gas exploration.
The case concerns the extent to which DNR is obliged to prepare written findings on whether the leasing of state-owned land is in the state’s best interest.
In February, a state Superior Court judge held that DNR’s practice of issuing only one best interest finding prior to a lease sale or sales is insufficient. Rather, he ruled the agency has an “ongoing duty” under the Alaska Constitution to issue such findings for subsequent project phases.
The ruling was a victory for a group of Alaska Native and environmental plaintiffs who challenged DNR’s Nov. 9, 2009, finding in support of planned 2009-2018 lease sales involving some 2 million Beaufort Sea coastal acres stretching from Barrow to the Canadian border.
The group argued DNR is required to do best interest analyses not only at the leasing stage, but also for the exploration, development and transportation phases of oil and gas projects — activities they contend can jeopardize subsistence hunting and fishing.
Organizations challenging the DNR include REDOIL, or Resisting Environmental Destruction on Indigenous Lands; the Gwich’in Steering Committee; the Alaska Wilderness League; the Center for Biological Diversity; and the Northern Alaska Environmental Center.
The DNR petitioned the Supreme Court to review and reverse the judge’s ruling, and the high court has accepted the case.
An unnecessary burden
Lawyers for the state argue Peter Ashman, Superior Court judge pro tem, got it wrong.
They say DNR has no constitutional or statutory obligation to write extra best interest findings for post-lease phases of oil and gas projects.
Further, the state lawyers argue that the state already does review these phases to make sure they’re consistent with the public interest and don’t, for example, harm fish and wildlife habitat. Before any operations can proceed on leased state land, a company must win DNR approval of a plan of operations. The DNR also reviews and approves unit agreements and plans of exploration and development.
Requiring a written best interest finding for every phase of an oil and gas project would burden DNR, invite lawsuits and “may significantly hinder DNR’s ability to permit oil and gas development,” the department’s lawyers wrote in their Supreme Court petition.
Judge Ashman held that a single best interest finding prior to lease sales, when it’s impossible to assess the “cumulative effects” of development, violates Article VIII of the constitution, which deals with use of the state’s natural resources.
State lawyers, however, argue the judge found a phantom mandate in Article VIII.
“Nowhere in Article VIII does the term ‘best interest finding’ appear,” they wrote.
The requirement for such findings before “disposal” of state land — that is, leasing — actually is found in Alaska statutes, the state lawyers note. And one statute says state officials “need only prepare a single written finding.”
DNR will comply
But Ashman seemed to question the validity of that statute, concluding that the Legislature “is not empowered to enact a statute which would relieve DNR of its ongoing duty to consider best interests of the state at every phase of any project.”
Lawyers for the Native and environmental organizations argue post-lease industry activities such as water withdrawals, geophysical exploration and pipeline construction “effectuate the disposal of state land,” and in fact have far greater impacts than the “paper transaction” of issuing a lease.
DNR’s perspective is very different. It argues it shouldn’t be required to comply with “an amorphous constitutional duty when no such duty exists.”
Subjecting DNR to a constitutional duty that differs from what the Legislature has prescribed “has the potential to raise long-term uncertainty about the validity of DNR’s procedures and to delay exploration activities,” state lawyers wrote in their Supreme Court petition. “Given the importance of oil and gas production to state coffers, the uncertainty and resulting delay would be harmful to the public interest.”
Ashman remanded the case to the DNR, ordering the department to conform to his ruling.
On July 14, DNR said it would comply with the ruling “unless modified by the Alaska Supreme Court.”
