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DNR: Walker appeal has ‘no legal grounds’ State officials rebut claims made in appeal of Alaska’s recent settlement of conflict over the Point Thomson oil and gas unit Wesley Loy For Petroleum News
A court challenge to the Point Thomson settlement has no legal basis and the state will seek to have it dismissed, an official with the Alaska Department of Natural Resources says.
The comments come in response to an administrative appeal Bill Walker has filed in state Superior Court in Anchorage.
Walker is an Anchorage attorney who once ran against Gov. Sean Parnell.
He is challenging the state’s recent settlement of litigation surrounding the undeveloped Point Thomson unit on Alaska’s eastern North Slope. Walker contends the agreement, which the Parnell administration negotiated with field operator ExxonMobil, is illegal and a bad deal for the state.
State officials contend the agreement is a strong one that should, at long last, compel ExxonMobil and its partners to start producing from the rich but technically difficult Point Thomson oil and gas field.
Further, the deal helps advance the state’s long quest for a pipeline to develop the North Slope’s vast but stranded natural gas reserves, the officials say.
‘Secret agreement’ “Mr. Walker has no legal grounds to file an administrative appeal challenging a settlement entered into by the Attorney General, and therefore the court has no jurisdiction,” DNR Deputy Commissioner Joe Balash said in a statement the agency provided June 13 to Petroleum News.
The state will move to dismiss the appeal, he said.
Walker contends the settlement exceeded the authority the state Legislature has delegated to the DNR commissioner.
DNR Commissioner Dan Sullivan led the state’s settlement negotiations with ExxonMobil, and signed the deal in late March along with state Attorney General Michael Geraghty.
One of Walker’s top complaints is that the state provided no public notice or opportunity to comment before the “secret agreement” was signed.
Walker also argues the DNR commissioner improperly agreed to not follow agency regulations for managing the unit, and left the method of field development up to ExxonMobil.
To rebut Walker’s contentions, Balash cited documents and testimony given recently to a legislative committee reviewing the Point Thomson settlement.
Broad settlement authority State officials argue the settlement is not even subject to an administrative appeal such as Walker’s.
“Alaska’s Attorney General has broad authority to enter into any agreement to settle litigation that he or she believes is in the best interest of the State,” Geraghty wrote in a June 7 letter to state Sen. Hollis French, an Anchorage Democrat and chairman of the Senate Judiciary Committee. “The exercise of this authority is not subject to legislative approval or administrative review, and requires no prior public notice or comment. Settling litigation is an executive branch function, and a legislative role would violate separation of powers principles.”
Legislative Counsel Donald Bullock likewise concluded that the attorney general “has broad authority to settle cases being litigated by the attorney general on behalf of the state.”
In a June 8 memo to French, Bullock went on to say: “While there may be different views as to whether each of the issues addressed in the PTU settlement agreement was resolved in the way someone else may have resolved an issue, the attorney general has the discretion to settle all issues of the case within the settlement. The settlement agreement apparently has been adopted by the court and may now be implemented.”
Balash, in a June 7 letter to French, wrote that “DNR fully stands behind the decision to settle the Point Thomson litigation.”
He said DNR has not abrogated its unit management powers and obligations, and can oppose a Point Thomson development approach that’s not in the public interest.
Point Thomson is on leased state acreage along the Beaufort Sea coast, next to the Arctic National Wildlife Refuge. Aside from ExxonMobil, major stakeholders in the unit include BP and ConocoPhillips.
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