Governor keeps oil contract secret

Administration ignores judges Tuesday deadline, says will release today

Posted: Wednesday, May 10, 2006

He asked, and won, but he didn't receive.

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Despite a second favorable court ruling, state Sen. Hollis French, D-Anchorage, did not gain access to any portion of a natural gas contract that has been hidden from the public eye.

Juneau Superior Court Judge Larry Weeks on Tuesday morning ordered the governor to release the contract by 4:30 p.m. French, a practicing attorney, filed for an injunction last month to loosen Gov. Frank Murkowski's grip on the contract.

Weeks' ruling said any portions of the contract agreed upon by the administration and the three oil producers - ConocoPhillips, Exxon Mobil and BP - had to be handed over to French.

Instead, the senator got a letter from the Alaska attorney general stating that the producers have not agreed to any individual provisions.

"I feel that they are very close, but they are not there yet," said Mark Morones, Department of Law spokesman.

French said it appears the governor was defying a court order, with the aim of buying time until lawmakers pass a new oil tax bill.

"That is distressing to me," he said. "I think the governor should have followed the judge's order and released the contract."

Morones confirmed that, as promised, Murkowski plans to release the contract today. The public will see a draft of the contract and the progress made up until this point. In February, producers agreed to fiscal terms of the contract, but they have not signed the document yet, he added.

When asked, Morones said he could not explain what events would take place in the 24 hours to make the contract ready for the public today rather than Tuesday. Morones only responded by repeating that he is sure it will be released today.

"He (Murkowski) told us there was a contract in February, and he told us there was a contract on other occasions. And now on the eve of us passing this oil tax bill, he comes out and says there is no contract," French said.

"I don't know if their credibility can get any lower," he added.

French said he would wait and see what the governor releases today before deciding further legal action. In the meantime, he is seeking advice from other legal experts, he added.

The state and producers have been negotiating for two years over building a $25 billion pipeline to release 35 trillion cubic feet of natural gas from the North Slope.

The administration has said it was waiting to release the contract until the Legislature passed a new state oil tax plan that to be rolled into the document and set in place for 30 years.

But Murkowski said he would release the contract today, even if the oil tax bill was not ready.

French's plan was to obtain a copy and release it to the public before the Legislature put the bill to rest, saying the contract may clear up confusion over why oil companies are willing to accept a tax increase.

"My concern is that whatever we take from the industry in the form of an oil tax will be given back in some other - up till now - secret provision of the contract," French said.

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