State Granted Intervention
in OCS Lease Sale Litigation
July 17, 2009
A U.S. District Court judge has granted the motion by the State
of Alaska to intervene in a case in which the Native Village
of Point Hope seeks to rescind dozens of leases issued by the
federal government under an off-shore oil and gas lease sale
conducted for federal waters in the Chukchi Sea.
When the state's motion was filed last month, Attorney General
Dan Sullivan underscored the need "to vigilantly safeguard
and defend Alaska's interests, particularly as they relate to
economic opportunities for Alaskans and the balance of state
and federal rights and responsibilities."
Sullivan said that the state's intervention is "necessary
to protect the state's interests, which are extensive and cannot
be adequately represented by the other parties in this proceeding."
The plaintiffs contend that the decision by the U.S. Mineral
Management Service to conduct the lease sale for the Outer Continental
Shelf, along with the environmental impact statement underlying
that action, violated federal law, including the Endangered Species
Act. The lawsuit seeks to void all of the leases issued in the
sale. If successful, this lawsuit could significantly undermine
OCS development and Alaska's economic opportunities.
In moving to intervene, Attorney General Sullivan noted the
change in the federal administration this year: "Although
the state hopes its interests will continue to be aligned with
those of the federal defendants, in an abundance of caution,
the state must act to ensure its interests are protected until
such time that the new federal administration's policy positions
are fully articulated."
The memorandum to the court describes the state's significant
interests in the litigation, observing that the oil and gas
industry is the largest part of the private employment
sector in Alaska and provides 90 percent of the general
fund revenue for state government. "If these activities
are curtailed," the state notes, "Alaska will be harmed
by the loss of property tax revenues, employment, and income
to local communities."
Rescission of the leases would curtail not only substantial expenditures
necessary to identify desirable tracts in federal Arctic waters
but also would have a chilling effect on industry's willingness
to participate in future lease sales off Alaska's coast and adversely
impact development of adjacent state land, according to a statement
by Kevin Banks, Acting Director of the Department
of Natural Resources' Oil and Gas Division.
Banks also noted that oil from the Chukchi Sea could lower the
unit cost for all oil if shipped through the TransAlaska
Pipeline System, thus increasing state royalties and taxes from
development on state lands. Eliminating this potential would
frustrate the state's goal of realizing the constitutional imperative
for maximizing resources for the benefit of all Alaskans, he
Source of News:
Alaska Department of Law
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