Proposals would give legislature final say in natural gas contract

Posted: Thursday, April 20, 2006

Legislators voiced a mix of outrage and support Wednesday for fast-track legislation that would prevent Alaskans from filing suit over a multibillion-dollar gas pipeline contract on anything other than constitutional grounds.

The House and Senate bills would make the Legislature the final arbiter of whether the gas contract is in the state's best interest.

The state revenue commissioner's findings on whether the gas contract is in the state's best interest would not be subject to "review, stay or injunction by any court," according to the bills now under review by the House and Senate Judiciary committees.

The committees held hearings on the controversial legislation Wednesday but held the bills over for further discussion. The legislation, Senate Bill 316 and House Bill 502, are supported by the Murkowski administration and sponsored by the Judiciary committees.

Some Democrats charged Wednesday that the legislation would cut off the public's ability to gain access to critical information about gas line negotiations that they may only be able to obtain through legal discovery.

But proponents, including House Judiciary Chairwoman Lesil McGuire, R-Anchorage, say it is merely "cleanup legislation" that will prevent bureaucratic problems from a court intervening in the gas line contract before the final decision is made.

Some ideas came up in committee to attempt to preserve a broader judicial role after final approval of the gas line contract, but no amendments were offered Wednesday.

In its current form, the bills would head off judicial review of such central questions as whether the gas on the North Slope is really stranded, said Sen. Hollis French, D-Anchorage.

Some gas consultants for the Legislature have questioned whether the gas is stranded, or in other words, if it is currently economically unfeasible to get to market.

The state's designation of the North Slope gas as stranded has allowed for secret negotiations between the Murkowski administration and oil companies who are negotiating to develop the gas pipeline.

Rep. Les Gara, D-Anchorage, said the legislation also could prevent judicial review on the major question of "whether the state gave away the farm" in approving the gas contract.

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State officials said in their testimony on the bill that the Legislature is authorized to speak on the public's behalf on whether the contract is in the state's best interest.

It's premature to have a court take up a challenge on the state revenue commissioner's findings before a final decision on the contract is made, said Larry Ostrovsky, an assistant attorney general for the Alaska Department of Law.

If a court intervened in the middle of the process, it could delay a final decision on the contract for as much as a year. "One ought to look at the total record," Ostrovsky said.

At least one Republican had some qualms about how the bills reflected on the Legislature's role in the process.

Sen. Gene Therriault, R-North Pole, suggested that if the Legislature is going to be considered a final arbiter, the state shouldn't discount potential constitutional questions about the Legislature's role in the pipeline contract.

The Alaska Stranded Gas Development Act allows the Legislature to hold hearings on the gas line contract in a 30-day public comment period, but the Legislature can only vote up or down on the contract.

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