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Governor will drop his Point Thomson public interest lawsuit


February 12, 2015
Thursday AM

(SitNews) - Alaska Governor Bill Walker (I) announced Wednesday during a House Resources committee hearing he will drop his public interest litigant lawsuit on Point Thomson once he submits legislation on Friday to ensure the state Constitution and state laws are never again violated in negotiations to develop Alaska’s natural resources.

Members of the House Resources committee had asked that someone from Walker's Administration testify on the Point Thomson lawsuit that Walker brought several years ago as a public interest litigant. Rather than send someone from his administration, Governor Walker spoke directly to the committee to "set the record straight".

Governor Walker, Wednesday, during a press availability on Point Thomson Decision.
Video clip photo courtesy Office of the Governor
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Walker explained why he brought his public interest lawsuit in 2005. He said, "In 1975 and 1977, the first wells were drilled at Point Thomson. Since then, we have known that the Point Thomson area is rich in oil and gas. Point Thomson is one of Alaska’s natural resource crown jewels."

Walker said in his testimony to the committee, "The field contains trillions of cubic feet of natural gas reserves, and hundreds of millions of barrels of oil and condensate. It’s a resource that is worth billions of dollars to the state and means thousands of jobs to Alaskans."

That wealth has been kept from the market and from Alaskans for decades, said Walker.

Walker presented some numbers and a history of how that happened.

He said the Point Thomson unit is 93-thousand acres of land which contains 38 leases. Richfield Oil, Humble Oil and BP acquired the very first oil and gas leases in Point Thomson in 1965. Twelve years later, Exxon discovered very substantial oil and gas in the main Point Thomson reservoir.

In 1977, the state approved ExxonMobil as the unit operator. For 22 years, Exxon presented 22 individual plans of development –one each year—for the Point Thomson unit. Yet, no development occurred testified Walker.

"So in 2005, as the state was evaluating yet another Plan of Development - the 23rd POD - I brought a lawsuit against the state on behalf of citizen taxpayers. The relief sought was for the state to at least hold a public hearing on why the state should or should not grant yet another POD when no development had taken place at Point Thomson since 1983," said Walker.

Walker said in his testimony, "As a result of that lawsuit, a hearing was held where I was able to present witnesses, which included Governor Wally Hickel and one of our constitutional drafters Vic Fisher, and shortly after that, the Murkowski administration rejected the POD [Plan of Development] and put the Point Thomson unit in default.
In 2008, DNR notified the lease holders that their leases had expired. In order to keep several leases in the Point Thomson unit, Exxon then agreed to drill the first new Thomson wells in more than two decades."

"That initial lawsuit was an important catalyst leading to development in Point Thomson today," said Walker to the committee members.

Walker said, "In May of 2012, the State released a signed settlement of the Point Thomson dispute but the terms of the settlement violated the Alaska Constitution and Alaska Law. Alaska’s Constitution and statutes are very specific about the public process required in the development of our natural resources because the citizens of Alaska, unlike any other state, own the resources. We are an Owner State and we should act like one."

In 2012, Walker brought suit against the state for entering into the Point Thomson settlement agreement which he said violated the Alaska Constitution and Alaska Statutes. Walker asked for no monetary damages, only that Alaska’s Constitution and Alaska laws be followed.

Walker said, "It’s now 2015. Alaska has a new governor; a governor who recognizes that settlement was illegal. It left Alaskans out."

Walker named a few of the illegal acts set forth in the settlements that he said are in clear violation of Alaska’s Constitution and Alaska law:

  1. The Settlement attempts to contract around the Department of Natural Resource’s Regulatory Authority in managing the Point Thomson Unit.
  2. The Settlement attempts to alter the regulatory Plan of Development process.
  3. The settlement results in the abrogation of the Commissioner of DNR’s obligation to make findings under 11.AAC.83.303, thus leaving the method of field development up to the Working Interest Owners.
  4. The State agreed to stand down and not object to any issues regarding the development of the Point Thomson Unit brought before the Alaska Oil and Gas Conservation Commission by the Working Interest Owners.
  5. The State agreed to an alternate method of dispute resolution other than what is set forth in Alaska statute.

This all leads to where we are today. Walker said, "Since I have taken office, I have met with ExxonMobil representatives numerous times; as recently as Monday."

Walker said his legal challenge to the Point Thomson settlement is not about ExxonMobil. "This lawsuit is not about stopping the development of Point Thomson. It is about following our Constitution and our laws in the development of our natural resources," he said.

Walker told the House Resources committee members that his only goal is to increase production of oil and gas from Point Thomson for the maximum benefit of Alaskans.

Walker said, "However, as the Governor of this state, I must be assured that people of Alaska are never again shut out of the process."

On Friday, the Governor said he will introduce legislation to strengthen the statutes so that future settlement negotiations related to the extraction of oil and gas on state land shall not be used as an excuse to bypass the Alaska Constitutional and legal obligations to citizens of Alaska.

Walker said, "As soon as I file this legislation, I will file my motion to dismiss the Point Thomson litigation."

"All I did in bringing this lawsuit was to stand up for Alaska. Someone had to," said Walker.

"Together, let’s make sure future Administrations cannot violate the Alaska Constitution and Alaska’s laws and bypass the public process in developing our natural resources when settling litigation," said Walker.

Walker concluded his testimony to the House Resouces committe members saying, "Together, let’s ensure that Alaskans are never again left out of the process to develop the natural resources that belong to all of us on our land, let’s never again allow the public trust that we hold sacred to be violated. Never, ever again."

House Resources Co-Chair Dave Talerico and Vice-Chair Rep. Mike Hawker commended Gov. Bill Walker for making the decision to drop his lawsuit clouding the future of Pt. Thomson and a natural gas liquefaction project.

“I’m sure this was not an easy decision to make, but I believe clearing a path forward for future Pt. Thomson development and for the Alaska LNG Project is the right choice,” said Talerico (R-Healy). “It’s important our businesses, the Pt. Thomson working interest partners, and hundreds of Alaskans benefiting through development jobs have certainty this work can continue.”

“It is excellent news that Gov. Walker has decided to drop his 3-year-old lawsuit challenging the Pt. Thomson settlement,” said Rep. Mike Hawker (R-Anchorage). “This litigation unnecessarily clouded the future of Pt. Thomson, and of the Alaska LNG Project. I’m looking forward to seeing that ‘motion to dismiss’ stamped and duly entered in the Supreme Court docket this Friday.”

As a courtesy, Talerico said in a prepared statement that he provided Gov. Walker an opportunity to speak to the Resources committee Wednesday afternoon. The committee had convened intending to hear an update on Walker’s litigation and the potential consequences to the state, from Department of Law attorneys. Talerico said he will pursue a comprehensive briefing by the state attorneys, for the public’s benefit and for the committee to better understand the issues surrounding the settlement, Walker’s litigation, and any potential future exposure the state may have in this matter.

Gov. Walker told the committee and the press Wednesday that he will file a motion dismissing his litigation against the settlement this Friday, after he files legislation in the House and Senate proposing changes to state processes related to legal settlements and resource development.

“I look forward to a thorough, public vetting of the Governor’s proposed legislation in the Resources Committee,” Talerico said. “We will want to ensure public processes are protected, while encouraging resource development in our state.”


Edited by Mary Kauffman, SitNews

Source of News: 

Office of the Governor

House Majority

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