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Walker says unprecedented Point Thomson settlement is illegal; Parnell administration says deal can't be challenged

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Posted: Friday, April 27, 2012 4:20 pm | Updated: 1:49 pm, Wed Jan 16, 2013.

Valdez attorney Bill Walker is seeking reconsideration of the settlement reached by the Parnell administration  with ExxonMobil and the other oil companies on the future of the Point Thomson oil and gas field, saying it violates Alaska law.

Attorney General Michael Geraghty denied the appeal Thursday, saying that it is not subject to reconsideration or appeal.

 "It is simply unprecedented in the annals of Alaska history for the executive branch to attempt to bind the citizenry to such a sweeping set of concessions, with no public involvement and without legislative approval," Walker wrote, along with Craig Richards, a member of the Walker & Levesque law firm in Anchorage.

They said the settlement violates the public notice clause of the state Constitution and state law regarding that clause.

Richards testified before the Senate Judiciary Committee today and said the settlement leaves many unanswered questions. One of those is the statement that from 2007 on Exxon has to spend $2 billion to retain certain rights. They say that funds spent by the companies on gas reinjection at Prudhoe Bay and even funds spent under AGIA may qualify.

Richards said the speed with which the agreement was signed raises questions. The agreement was signed by the attorney general March 28th and all the oil companies signed it on March 29th.

"It was filed with the Superior Court at 3:20 p.m. on March 29th. In  this case, the settlement agreement was approved and the case dismissed by 4:30 p .m."

Richards said that getting judges to act on issues in two or three days is usually considered rapid. Why was the decision approved so quickly in secret?

Geraghty said he wasn't involved, but he doesn't think it is unusual in a major case to have the dismissal happen that rapidly.

Geraghty defended the settlement and criticized Walker's letter and Richards' comments. He said that it is easy for critics to complain and suggest that they could have managed a better deal, but they were not present and have no idea what they might have been able to get in the negotiations.

Walker said the settlement is not in the best interests of the state as the oil companies can retain most, if not all, of the Point Thomson acreage "with little or no addtional work commitments."

Geraghty wrote that state settlements are "not subject to administrative challenge, by reconsideration or otherwise."

"The Point Thomson settlement has been executed and all related litigation has been dismissed," he wrote.

 Walker is not convinced and said he plans to continue to seek review of the decision.

He said that "time and time again" Exxon has shown that it will pursue the smallest work commitment allowed by the state. In this  case, he said that by following an agreement that Exxon already committed to in 2009, for 10,0000 barrels a day of production, "Point Thomson will be held in perpetuity by the owner group."

The settlement "fundamentally alters the regulatory and contractural relationship current existing between the state" and the oil companies and it should be submitted to the Legislature for approval.

In Geraghty's letter Thursday, he said the agreement is within the "legislatively designated authority" of the Department of Natural Resources.

Geraghty asked what options Walker and Richards were suggesting.

"it sounded as if if only Mr. Walker and his attorney had been at the table, the state would have negotiated a much better deal, that there were all these legal errors and mistakes and so on in the agreement. With all respect that simply reflects a lack of experience and a lack of judgement in my view," the AG said.

"Unless you're in the room. unless you've walked a mile in those shoes, I think, it's unfortunate to suggest that I would have done a better deal because otherwise what are we talking about? If you do a better deal then you're talking about the impasse, the delays and the lack of progress that's been going on as Mr. (Mark) Myers pointed out for many many years. A settlement is rarely a perfect vehicle for either side. This settlement is not a perfect deal for either side. The fact that it was being negotiated was not a secret."



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