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Palin selects Rutherford to head DNR Former deputy commissioner to hit ground running; gas line discussions with producers, explorers to begin immediately Kay Cashman Petroleum News
After Gov.-elect Sarah Palin named Tom Irwin leader of the transition team for the Alaska Department of Natural Resources it came as no surprise Nov. 28 when she announced Marty Rutherford would be acting commissioner of DNR.
Rutherford, 55, who has served as DNR deputy commissioner for more than 10 years for both Democratic and Republican governors, was one of six department officials who resigned from incumbent Gov. Frank Murkowski’s administration in late 2005, protesting the governor’s dismissal of then-DNR Commissioner Irwin. All seven officials — dubbed the “Magnificent Seven” by DNR employees — were unhappy with the concessions the administration was making in fiscal contract negotiations for a North Slope gas pipeline with the three major oil producers that control most of the Slope’s discovered natural gas reserves — BP, ConocoPhillips and ExxonMobil.
Palin said Rutherford will join her the week of Dec. 4 in talks with oil and gas companies — explorers and producers — interested in seeing a gas line built to take North Slope gas to market.
“We’re trying again,” Palin said.
Rutherford said she was “very excited to join the Palin-Parnell administration” and was “looking forward to returning to DNR” and the “gas line issue. It’s been a year or so since I’ve been involved. I’m looking forward to participating next week in discussions with explorers and producers.”
A life-long Alaskan, Rutherford was also lead negotiator on a preliminary fiscal gas line contract between the State of Alaska and TransCanada, one of the alternative pipeline proposals Palin said she will take a look at when she takes office Dec. 4.
Rutherford has said in the past that the agreement between TransCanada and the state could be completed in as little as three months.
“Assuming everyone is still willing to move forward under those terms, it would take at least three months to paper the contract with TransCanada, but we could start the public outreach immediately because the commercial terms are fully developed,” she said in August 2006. The agreement, Rutherford said, also allows for the North Slope producers to own part of the pipeline.
“It’s a much better deal for the state” than the contract negotiated by the Murkowski administration; “it doesn’t have nearly the amount of concessions,” she said.
Rutherford’s idea to make appointment temporary At the Nov. 28 press conference when Palin announced Rutherford’s appointment, she thanked Rutherford for “the sacrifices she has made” and for more than “20 years in helping manage Alaska’s resources.”
The new DNR commissioner “understands constitutional rights,” Palin said, noting that she also had “tremendous respect” for Rutherford’s father, John Kelsey.
When asked why Rutherford had been appointed acting commissioner vs. commissioner, Palin said it was Rutherford’s idea to take the job on a temporary basis. Rutherford will be on leave from her job at the Alaska Mental Health Trust Land Office.
“I’m excited to do this and help while I can, and we’ll see how things evolve,” Rutherford said.
When asked if any of the other DNR officials who resigned under Murkowski will return, including Division of Oil and Gas Director Mark Myers, Palin said, “I am speaking with a couple of those individuals.”
Myers, however, will likely not be among the officials to return to state government, as he has since been appointed by President Bush to head the U.S. Geological Survey, a division of the U.S. Department of the Interior.
Point Thomson gives state leverage in gas line talks Rutherford was asked her opinion of DNR Commissioner Mike Menge’s Nov. 27 decision to put the Exxon-operated Point Thomson unit in default. She said she thought it was a good decision, and “long overdue.”
“Mark Myers made that decision over a year ago,” she said, noting Menge simply “confirmed it yesterday.”
Rutherford said the decision to put the Point Thomson unit in default, which will result in the state taking the leases back, will be an asset in future gas line negotiations with the producers (Exxon and BP are two of the three majority owners of the Point Thomson leases).
The decision “fundamentally shifts the state’s ability to negotiate a gas pipeline contract as we move forward,” she said.
If Exxon sues the state over the decision, Rutherford thinks the “state would be successful” in a legal battle.
“If the (Point Thomson) leases are released, I think multiple companies would be interested.”
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