|
Walker to drop Point Thomson litigation, introduce legislation
Alaska Gov. Bill Walker told the House Resources Committee Feb. 11 that he will be dropping the litigation he filed in 2012 against the Point Thomson settlement and will introduce legislation to ensure that future settlements of resource issues won’t bypass the public process.
Both will happen Friday (Feb. 13), he said.
The governor had said in a Feb. 5 press availability that dropping his suit against the Point Thomson settlement has been his plan for some time.
The March 2012 settlement negotiated by the administration of then-Gov. Sean Parnell with the Point Thomson unit owners ended a conflict over field development that began in 2005 when the administration of then-Gov. Frank Murkowski began taking steps to terminate the unit and take back the leases for lack of development.
The settlement, touted at the time as putting an end to a dispute that could have run years longer, included a commitment to an initial production system which would begin production in the 2015-16 winter season, in exchange for reinstatement of the unit and leases.
ExxonMobil, the Point Thomson field operator, is constructing the IPS. Once that is on production at 10,000 barrels per day the Point Thomson unit owners have three alternatives for field development: going ahead with a major gas sale project by June 2016; expansion of Point Thomson liquids production to 30,000 bpd; or reservoir integration between Prudhoe Bay and Point Thomson, with dry gas from Point Thomson used for injection at Prudhoe Bay to boost recovery there.
In the settlement the state reinstated the disputed unit and leases and the companies vacated a 2010 ruling in Alaska Superior Court that had reversed, on procedural grounds, the state’s termination of the unit. The state had appealed that decision to the Alaska Supreme Court, which heard arguments in early February 2012. The Supreme Court hadn’t ruled at the time of the settlement and at the joint request of the state and the companies the court dismissed the appeal the day before the settlement was announced.
Challenge in 2012 Walker challenged the settlement in early June 2012, telling Petroleum News at that time in an email that it was a “bad deal” for the state, “a giveaway of historic proportions” and an action which “exceeded the authority” delegated to the commissioner by the Legislature.
Walker said state officials “provided absolutely no opportunity for public and notice before the secret agreement was signed.” He also said the Department of Natural Resources commissioner, then Dan Sullivan, made best interest findings but “did not provide the evidentiary support Alaska law requires,” and “agreed to not follow DNR’s own regulations for certain development activities and decisions related to the unit.”
In response to Walker’s suit, state officials said the agreement was a strong one that would compel development of the field and that the agreement helped advance the state’s goal of developing North Slope natural gas.
In a statement, then-DNR Deputy Commissioner Joe Balash said Walker “has no legal grounds to file an administrative appeal challenging a settlement entered into by the Attorney General (both the DNR commissioner and the attorney general signed the settlement), and therefore the court has no jurisdiction.”
Unsuccessful in Superior Court, Walker appealed to the Alaska Supreme Court, where the suit remains.
House Republican request The issue flared in early February when House leaders published a letter they sent to Walker on Jan. 29, expressing “grave concerns” that the Point Thomson lawsuit “breeds uncertainty and instability,” citing both issues with ongoing work at Point Thomson and with the Alaska LNG project.
The legislators said that if Walker is seeking a change in state statute through the litigation, he should submit legislation for consideration by the Legislature.
Noting that Walker and Attorney General designee Craig Richards, formerly Walker’s law partner, have asked attorney Robin Brenna to serve as counsel in the suit, the legislators told Walker “you remain the plaintiff with the discretion to continue with or terminate your lawsuit.”
It is time to move on, the legislators said, and asked that the governor terminate his lawsuit against the Point Thomson settlement.
Concern over precedent Walker told House Resources the legislation he plans to introduce would strengthen state statutes so that future settlement negotiations “related to the extraction of oil and gas on our lands shall not be used as an excuse to bypass our Constitution and our legal obligations to the citizens of Alaska.”
“As soon as I file this legislation I will file my motion to dismiss the Point Thomson litigation,” he said.
In a press availability following his House Resources announcement the governor said the litigation won’t be very complicated, but would ensure that you couldn’t do in settlement of litigation on oil and gas development something that you couldn’t do otherwise - that “there’s no super powers based on settlement of a piece of litigation. The public process cannot be excluded from a settlement of litigation.”
The governor said, as he has earlier, that he “did not want to have this settlement be a precedent, a new way of doing business in Alaska ... bypassing the public process - that’s the hole I want to plug.”
“I’m going to be razor focused on getting Point Thomson developed,” Walker said, and mentioning four to five meetings he’s had with ExxonMobil since he became governor, he said he is “encouraged by what I’m hearing from Exxon.”
Walker said Exxon’s “spirit of cooperation and openness” at those meetings gave him some peace about dropping the litigation.
“I’m sure this was not an easy decision to make, but I believe clearing a path forward for future Pt. Thomson development and for the Alaska LNG Project is the right choice,” said House Resources Co-Chair Dave Talerico, R-Healy, in a statement issued after the governor’s announcement.
The committee’s vice chair, Rep. Mike Hawker, R-Anchorage, called it “excellent news” and said: “I’m looking forward to seeing that ‘motion to dismiss’ stamped and duly entered in the Supreme Court docket this Friday.”
- Kristen Nelson
| 