Senator asks court to make gas deal public

Governor staff: Pipeline contract won't be released early

Posted: Sunday, April 23, 2006

A state senator is asking a court to force the release of a natural gas contract between Gov. Frank Murkowski and the state's three largest oil producers.

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Sen. Hollis French, D-Anchorage, filed for an injunction Friday in Juneau Superior Court.

He asked the court to issue an order making public the long-term fiscal agreement to recover the 35 trillion cubic feet of North Slope natural gas reserves.

Outside the courthouse, French said he considered this the last step after he was denied two public-records requests. He said he would still like the governor to release the contract on his own.

"I'm hoping that this just puts pressure on them to do the right thing," French said.

Murkowski spokeswoman Becky Hultberg said administration officials have no plans to release details of the contract outside of their own timeline.

"We're very confident in the process that we've been following," Hultberg said. "This is a good example of the kinds of delays and distractions that can slow down this process and keep the contract getting to the Legislature and the public."

The natural gas deal, which has been negotiated for more than a year between the Murkowski administration and BP PLC, Exxon Mobil Corp. and ConocoPhillips, is a key step to building a $25 billion natural gas line from Alaska to Canada and to markets in the Midwest. The contract was negotiated in secret under the state's Stranded Gas Development Act.

Murkowski announced in February that all parties had agreed to the provisions in the contract, but the deal remained under wraps while the governor introduced a bill to replace the state's oil production tax with one based on energy companies' net profits.

The new tax is to be incorporated into the contract and locked in for 30 years, Murkowski has said.

In an April 9 denial to French's public records request, Murkowski Chief of Staff Jim Clark writes that the gas contract will not be complete until the Legislature finishes its work on the tax bill. Technical changes are also being written into the contract, Clark wrote.

BP spokesman Ronnie Chappell also said the contract wasn't finished, although he declined to say what was still lacking since the Feb. 21 announcement that an agreement had been reached.

"I think we are eager to finish negotiation of the contract and to make it public. We expect the contract to receive significant public scrutiny," Chappell said.

French said the gas deal should be made public now so lawmakers can see how the new petroleum profits tax, or PPT, they are considering fits into the contract.

It would be the state's most significant change to the tax structure in decades, with hundreds of millions in annual tax revenue at stake. The governor has added to the pressure by repeatedly warning that lawmakers risk the gas deal if they pass a tax different from the one he introduced.

"It's really impossible to understand why they would want us to make such a huge decision without seeing the document itself," French said. "Over and over, I've been told by the public that we would not be doing our jobs to vote on the PPT legislation without seeing the contract."

There is nothing in law keeping the contract from becoming public; the only confidentiality provision in the Stranded Gas Development Act is to protect documents that reveal negotiating secrets, French said in his legal document.

Without a clear statement that the contract itself is confidential, the contract is a public record and must be disclosed, French wrote.

Plus, the governor has the authority to release the contract as Alaska's chief executive, French wrote.

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