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What will the view be in 25 years? Chairman of AOGCC watchful for current industry practices that may be viewed as wasteful by the next generation Kristen Nelson
John Norman was named chairman of the Alaska Oil and Gas Conservation Commission by Alaska Gov. Frank Murkowski in January, at the end of what had been a rough year for the three-member commission and its small staff.
It was down to one commissioner, geologist Dan Seamount, after two commissioners appointed in February 2003, petroleum engineer Randy Ruedrich and public member Sarah Palin, resigned. Ruedrich left in November, in the midst of a controversy over potential conflicts of interest, and Palin, a former mayor of Wasilla and the commission’s chairwoman, left in January, saying it was time to move on, but citing the furor around Ruedrich as part of the reason for her departure.
And the commission had been in the news a lot, not normal for the quasi-judicial body charged with ensuring that there is no waste in the production of Alaska’s oil and gas resources and with protecting correlative rights, which means preventing companies from draining resources from adjacent properties.
“We’re not supposed to be in the newspaper,” Norman told Petroleum News Sept. 17. “Our job is not to be making the headlines — we’re supposed to be regulating.”
When the governor announced Norman’s appointment at a press conference Jan. 23, he said he asked Norman, “among his other duties, to review some of the recommended efficiencies in the operation” of the commission proposed by Palin and Seamount under the administration’s missions and measures evaluation.
That review is one reason the commission has been operating with just two commissioners.
Norman said because the governor asked him to take a “top-to-bottom look at the commission,” he recommended not filling the third commissioner’s seat until he’d had a chance to do an evaluation and make any recommendations for change. And because things had been so unsettled at the commission, he thought it was only fair to let the dust settle before another commissioner was named to the petroleum engineer seat. The state’s referee Norman said he thinks of the commission as a referee.
Compare it to a sporting event, he said: The state or federal government, or a Native corporation, has leased the “sporting arena to some teams for a percentage of the profits of the game.” The teams come in and perform: maybe there are profits, maybe not.
“The way I look at our role, we’re the referee: we’ve got the whistle in our mouth…”
The commission is not part of the game, he said. The players are the ones who are “taking the risk and doing the drilling, but they need to understand that we’re here to make sure that whenever you drill a well, it stays on your side of the line … it doesn’t pollute the water, in other words, we make sure people do it fairly and properly.”
As for suggestions that have been bandied about for changing the commission, Norman said: “This has been a superb commission and it’s viewed that way and when the governor called me I welcomed the opportunity to get back over here…”
It’s important that the public has “absolute confidence” in the commission, “and we necessarily have to stay at arms length from the industry because we regulate them and we have to be impartial in the way we apply the rules and by and large that’s the commission that I knew,” he said, referring to his association with the commission as an assistant Attorney General in 1969-71. Commission not here to raise money At one time the commission was part of the Department of Natural Resources, but the Legislature separated the two to separate the state’s landlord and regulatory functions, and Norman said “it’s very important that the commission in its regulatory role not get mixed up with the state’s legitimate desire to maximize revenues for oil development.”
“We don’t have a mandate to generate dollars,” he said. “… Our mission is to prevent waste, to protect supplies of fresh water and to protect correlative rights, the rights of adjoining land owners.”
If, for example, the commission was moved back to the Department of Natural Resources, companies might have a concern about confidentiality of data that is turned into the commission, which keeps such data confidential from other state agencies, and even within the commission. “The military word for it is ‘need to know,’” Norman said, and people at the commission — even commissioners — don’t have access to confidential information unless they have a need to know.
Norman said he is still refining his thoughts on what changes he might recommend to the governor for the commission. For the first few months there were “a number of sizeable projects … and my time was totally consumed just with dealing with the day-to-day work” and trying to gain a clear understanding of the work of each employee, Norman said.
When he thinks about the commission, Norman said, he asks himself: “Will this work 25 years from now?” He did say he has concluded that there is value “in several commissioners, because sometimes you get disagreements there’s a deliberative process. ... We all bring in certain biases,” Norman said.
As for what Norman found at the commission, he says “it’s one of the most professional groups of people I’ve ever been associated with, and I’ve been … a military officer, I’ve been inside a major oil company, I’ve been in state government and I’ve been in private practice, so I have some sense of what proper behavior is, and the staff here is excellent.”
Norman has also had an opportunity, through the Interstate Oil and Gas Compact Commission, “to interact on an extremely accelerated basis with the regulatory agencies in all of the other states and believe me, Alaska compares very well,” he said. That is also the feedback he said he’s gotten from operators who have done business in other states.
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