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Providing coverage of Alaska and northern Canada's oil and gas industry
November 2006

Vol. 11, No. 47 Week of November 19, 2006

Murkowski must have legislature’s approval

The Associated Press

A judge ruled Nov. 10 that Gov. Frank Murkowski must have legislative approval before signing any natural gas pipeline contract.

Judge Niesje Steinkruger’s order blocked Murkowski from executing the contract negotiated with BP, ConocoPhillips, and ExxonMobil to develop North Slope natural gas reserves.

Lawmakers have refused to authorize the contract that would set fiscal terms for the $25 billion North Slope pipeline. Most legislators believe the contract gives away too much to the oil companies.

The governor has refused to say that he won’t sign the contract without legislative approval, which prompted the lawsuit.

“That’s all we wanted,” Sen. Ralph Seekins, R-Fairbanks, told the Fairbanks Daily News-miner after the ruling. “We were right.”

Eight members of the Legislative Council sued the governor on behalf of the state Legislature. The 14-member council is a joint panel of the House and Senate that conducts the Legislature’s business between sessions.

Seekins, who is not on the Legislative Council, joined the lawsuit on his own behalf after the governor suggested to him that he might sign the contract without the Legislature.

Murkowski could still appeal the ruling, said Bill Large, a lawyer representing the legislators, but time is short: “If he’s going to do anything, it’s going to be fast.”

Murkowski is on out of the country on a trade mission through Nov. 12. His spokesman, John Manley, said the decision was under review and they were “deciding if we want to appeal to the Supreme Court level.”

Murkowski lost his bid for re-election in the GOP primary election in August and leaves office when Republican Sarah Palin is sworn in Dec. 4.

Steinkruger did not rule directly on the question of whether the governor has the authority to sign the contract by himself. In issuing a preliminary injunction, she found that it was likely he did not have that authority and that preventing him from signing the contract would cause him little or no harm.

Murkowski’s lawyer, Department of Law attorney Larry Ostrovsky, did not argue in court the question of whether Murkowski has the authority to sign the contract. Instead, he maintained that the court should not play a role in a political issue involving the relationship between state lawmakers and the governor.

Steinkruger dismissed that argument, noting in her decision that the Alaska Stranded Gas Development Act, the law Murkowski used to negotiate the contract, requires legislative approval and that the governor has not challenged the constitutionality of the law.

Does the governor actually plan to sign the contract without legislative approval?

“We don’t know at this point,” Manly said.





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