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Lawsuit Seeks to Prevent Governor from Signing Gasline Contract


November 03, 2006

A bipartisan group of Alaska lawmakers have banded together in a legal effort to stop Governor Frank Murkowski from signing the proposed natural gas pipeline contract.

Several members of the Legislative Council agreed to sue the governor based on Sen. Ralph Seekins (R - Fairbanks) conversations with Gov. Murkowski. Legislative Council is the committee tasked with running the legislature during the interim.





Sen. Seekins chaired the Senate Special Committee on Natural Gas Development during this year's two special sessions and joined the lawsuit. He asked Gov. Murkowski twice if he planned on signing the contract without legislative approval.

"The governor said both times he was strongly considering it and that he may sign it in the near future. I urged him to leave it for the next governor because the draft contract has serious flaws and both the public and the legislature want significant changes made. The entire process for getting a gas pipeline is threatened by his potential unilateral action. We didn't want to take this step but we felt we had to because he's still threatening to sign it and we have to take that threat seriously," said Sen. Seekins.

Rep. Max Gruenberg (D-Anchorage), a Democratic member of the Legislative Council, said Frank Murkowski should not use either campaign funds or government resources for his defense in the lawsuit filed against him by the Legislature.

"Even Attorney General David Marquez has said it would be unconstitutional for Murkowski to sign that flawed contract proposal without legislative approval," Gruenberg said Friday. "For that reason, it would clearly be a conflict of interest if Marquez or any other state resources are used for Murkowski's defense in this case."

Gruenberg added that the Alaska Public Offices Commission said Murkowski cannot use any campaign funds for his defense, because the case is not campaign related.

"This suit is being filed against Frank Murkowski, to prevent him from acting unconstitutionally and outside his role as governor." Gruenberg said. "He should not be allowed to use public funds or resources to defend what amounts to personal bad behavior."

Governor Frank H. Murkowski responding Thursday to the lawsuit filed by legislators on October 31, 2006, said, "Having been a U.S. Senator for 22 years, I am very respectful of the Legislature's role in the gas pipeline process. Throughout the process, we have done everything the Legislature required us to do under the Stranded Gas Development Act."

Murkowski said, "My administration has: - negotiated a draft contract with the producers; - conducted an extensive public and legislative comment process regarding the contract; - prepared a 200-page response to the public and legislative comments that addresses those concerns in detail; and - prepared a fiscal interest finding, which describes the gas pipeline project and of which the contract is a part."

"We have kept the Legislature informed during the process and sought amendments to the SGDA where a successful outcome to a competitive contract required," said Murkowksi. "For example, starting in May 2006, and over two special sessions of the Legislature, I have urged it to enact the changes it wanted to the May 24, 2006 contract that I negotiated with the producers along with amendments to the SGDA, so we could move the SGDA process forward."

Gov. Murkowski said, "Alaska needs to continue with the SGDA process, make changes to the May 24, 2006 contract and ratify it ­ as soon as possible."

"Why act now? Because we cannot afford delay!," said Murkowski.

"First, with oil production facing a significant decline during the next ten years and gas revenue at least ten years off, a delay in the gas pipeline project startup will result in a serious fiscal gap occurring in the next few years, potentially forcing severe budget cutbacks," said Murkowski.

The governor said, "Between now and 2016, the state's discretionary budget is expected to have an accumulated deficit of $10 billion. A delay in constructing the gas pipeline would increase the state budget deficit until first gas flows."

"Second, according to Information Insights' analysis, for each year of delay in the start of the gas pipeline operation, the estimated net present value revenue loss to state and local governments would be approximately $1 billion per year," said Gov. Murkowski.

"Third." said Murkowski, "we can expect a dramatic increase in competition for Alaska gas from other energy sources. For example, coal that can be supplied for a price as low as $2 per MMBtu is now more competitive in the electricity markets with strong support from the U.S. federal government and various coal-producing states."

"Liquefied natural gas (LNG) imported to the Gulf Coast of the U.S. is certain to become a stronger competitive factor. Because there are existing pipelines connecting the Gulf Coast to the Midwest, the most immediate competition will be from the new LNG facility currently being constructed at Sabine Pass on the Gulf Coast. The LNG will directly compete with Alaska North Slope gas," said the governor.

"Alaska cannot afford a delay in this project. It makes no sense to set aside the work that has already been done, repeal the SGDA, and start over," said Murkowski.

"The more delay, the greater the chance that Alaska will suffer the greatest risk of all to its economy ­ no gas pipeline," said Governor Murkowski.

Sen. Gene Therriault (R - North Pole), Sen. Gary Wilken (R- Fairbanks), Sen. Tom Wagoner (R - Kenai), Sen. Bettye Davis (D - Anchorage), Rep. John Coghill (R- North Pole), Rep. Max Gruenberg (D - Anchorage) and House Speaker John Harris (R - Valdez) have joined the lawsuit.

Sources of News:

Office of the Governor

Alaska Republicans

Alaska Democrats


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Stories In The News
Ketchikan, Alaska