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Vol. 28, No.47 Week of November 19, 2023
Providing coverage of Alaska and northern Canada's oil and gas industry

Court order: Well logs public now; DNR must release ANWR area data

Steve Sutherlin

Petroleum News

The Superior Court for the state of Alaska has ordered the Alaska De-partment of Natural Resources to release the well logs relating to the Alaska State G-2 well, North Staines River #1 well, Sourdough #2 well, Sourdough #3 well, and the Staines River State #3 well. The order was signed by Superior Court Judge Jack R. McKenna on Nov. 9 in Anchor-age.

(See map in the online issue PDF)

The case, Donkel et. al. v. SOA Department of Natural Resources, is an administrative appeal challenging the DNR commissioner's decision to deny a June 2022 request by Daniel K. Donkel and Samuel H. Cade for the log data from the wells, which are all located on state land in the Point Thomson Unit.

The five wells border the federally owned ANWR, and because the ANWR lands were unleased, DNR subjected the well data to extended confidentiality between 1981 and 1998, to be released once the ANWR lands were disposed.

The court said Alaska law provides that if the data contains significant information relating to the valuation of unleased land within the vicinity of the well DNR may keep the well log data confidential for a reasonable time.

The law "provides that the reasonable time should not exceed 90 days af-ter the disposal of all lease land within a three-mile radius of the well," the court said. "It clearly states that land is disposed when an oil and gas lease is either granted or issued."

In January 2021, the federal government leased 437,804 acres of ANWR land to nine leaseholders in competitive oil and gas lease sales. All the leases in the sale were sold to the highest bidders and the leases were fi-nalized on June 20, 2021.

However, two weeks after the federal government auctioned and final-ized the leases President Joe Biden issued Executive Order 13990 requir-ing the Secretary of the Interior to place a moratorium on all activities of the federal government relating to implementation of the ANWR oil and gas leasing program.

DNR argued that Donkel and Cade's claim is moot because there is again unleased land within a three-mile radius of the wells, and further argued that the DNR commissioner could consider the federal govern-ment's actions after the end of lease sales in determining that the PTU well logs remain subject to extended confidentiality.

The court disagreed with DNR's arguments because an appeal "must prevent a live controversy for which the court can provide specific relief. A claim is moot when the party bringing the action would not be entitled to any relief even if it prevails."

As to the question whether the DNR commissioner may determine that uncertainty regarding the validity of oil and gas leases provides the commissioner with the legitimate reason to find that land has not been disposed, the court found that the statutes do not provide the commis-sioner with the ability to make that determination.

"The statutes are clear when oil and gas leases are issued on a piece of land, that land has been disposed and the corresponding data loses its confidentiality" because these lands were leased, they were also disposed within the meaning of the state law therefore the log data should have been made publicly available within 90 days, the court said.

"The DNR commissioner's decision to deny appellant's request for ac-cess to the PTU well logs had no reasonable basis in law," the court said. "There was an abuse of discretion, therefore the court orders to release the well log data."

"The State is reviewing the decision and legal options," a spokesperson for the Alaska Department of Law told Petroleum News Nov. 15.

Citizen's right to access

"Alaska courts have characterized the citizen's right to access public records as a fundamental right unless specifically provided, otherwise the public records of all public agencies are open to inspection by the public under reasonable rules during regular office hours," the court said.

The statutes give DNR no room to consider what is prudent before re-leasing previously confidential well log data, it said.

The statutory scheme here serves a dual purpose, it said. On one hand it serves to protect the oil and gas industry's proprietary interest in keeping its well data confidential, on the other hand it serves to ensure that the public has access to well data in the state.

The interests of the oil and gas industry are served by providing well op-erators with a preferential position in bidding on lease sales within the three-mile radius of wells on which those operators have spent signifi-cant resources, the court said. Once the well operators have an oppor-tunity to bid on the lease based on possession of the confidential well da-ta, the purpose of the extended confidentiality has been met and the well data should be turned over to the public.

In this case, the DNR commissioner was concerned that DNR would not be able to un-ring the bell if it were to release the well log data, but the federal government has already rung the bell by holding a competitive lease sale for the ANWR lands, the court said. The PTU well operators had a chance to bid on the ANWR leases. None of them did, therefore the operators have enjoyed the benefit of exclusive access to the data during the pendency of the lease sales.

State calls lease cancellation illegal

The DNR commissioner's position seems at odds with the state's posi-tion on the Biden administration's actions regarding the ANWR lease sale.

The Alaska Industrial Development and Export Authority filed suit against the Department of Interior for illegally canceling leases in the ANWR 1002 area and "the detrimental impact this action has had on the Alaskan communities involved," AIDEA said in an Oct. 18 release.

"The cancelation of leases by the Department of the Interior shows arbi-trary and capricious disregard for Federal law," AIDEA said, adding that Section 20001(b)(2)(A) of Public Law No. 115-97 clearly states, "The Secretary shall establish and administer a competitive oil and gas pro-gram for the leasing, development, production, and transportation of oil and gas in and from the Coastal Plain."

"The federal government is determined to strip away Alaska's ability to support itself, and we have got to stop it," said Gov. Mike Dunleavy.

"The State of Alaska will continue being bold in defending our rights," Dunleavy said. "We will not allow illegal actions to occur against Alaska and I fully support this lawsuit."

AIDEA said DOI's cancellation of lease agreements is unlawful for sev-eral reasons: 1. DOI failed to adhere to its own rules governing lease termination, rendering its cancellation of the 1002 area leases invalid. 2. The 1002 area leases were and are lawful. DOI's reversal from its origi-nal position that the leases were legal to its current position that they are illegal directly contravenes and frustrates Congress's directive in the Tax Act to hold an initial sale and issue leases for oil and gas production and development by 2021. 3. DOI's unilateral decision to cancel the leases violates constitutional and statutory due process rights. 4. DOI's decision was inadequately reasoned and unsupported by facts, making the lease cancellation decision arbitrary and capricious.


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