Gov. Bill Walker said Thursday he intends to soon dismiss his personal lawsuit over his predecessor's settlement with ExxonMobil regarding development of the long-dormant Point Thomson state lease on the North Slope.
That is what lawmakers in the Alaska House recently requested in a letter sent to the governor. But Walker's press secretary, Grace Jang, said the governor's statement that he would dismiss the suit has nothing to do with that request.
It's "of his own volition," she said.
The 2012 settlement essentially created a development plan at the Point Thomson gas field. Walker asserted Thursday, as he has done since bringing his lawsuit, that the settlement by Gov. Sean Parnell's administration and Exxon was "illegal" because it bypassed required regulatory steps that would have given the public a chance to comment on aspects of the project.
As a "citizen taxpayer," Walker brought the lawsuit in 2012. He declined to drop it after becoming governor in December, leading critics to charge that Walker had created a conflict of interest as both plaintiff in the case and as the defendant in his role overseeing the state's executive branch.
Adding to the potential conflict, critics said, is that Walker named his former law partner and attorney in the case, Craig Richards, as the state's attorney general.
As attorney general in late December, Richards recused himself from the case, and delegated his authority to Martin Schultz, head of the legal department's oil, gas and mining section. Walker, an attorney, delegated his authority on state matters related to Point Thomson to Lt. Gov. Byron Mallott to avoid a conflict of interest.
Walker said he stood up for Alaska when he brought the suit. Now, his goal is to dismiss it soon. But first, he must find a way forward to make sure another Point Thomson-type settlement doesn't happen again. Walker said he has been working on a resolution for some time, and he can focus on finalizing it now that his budget has been presented.
"As it sits, this leaves a very dangerous precedent on how to conduct resource development in Alaska," he said.
A company could get involved in litigation, settle with the state and bypass the public process, he said. He pointed out that ExxonMobil had delayed development at the field for decades, submitting nearly two dozen development plans before the state revoked the leases, leading to a court battle and the Parnell-Exxon settlement.
House Speaker Mike Chenault and four other leaders in the House recently sent Walker a letter urging him to drop his lawsuit and submit legislation to address his concerns, saying his continuation of the case sent the wrong signal to industry.
The letter said the suit threatens Point Thomson development. The field is considered a critical part of the Alaska LNG project because of its huge reservoir of natural gas.
Point Thomson, where Exxon has said it is spending $4 billion, is expected to add 10,000 barrels of condensate oil to the trans-Alaska pipeline, with first production planned for 2016. The field also contains about one-fourth of the North Slope's 35 trillion cubic feet of natural gas.
The field sits near the U.S. Arctic Ocean at the western doorstep of the Arctic National Wildlife Refuge, a 19-million acre tract that President Obama recently said he intends to further protect from oil and gas development.
The letter to Walker said the lawmakers have "grave concerns" that the lawsuit breeds uncertainty and could delay or halt the Point Thomson development. That instability puts at risk "the billions being spent to develop Point Thomson, more than 1,000 Alaska jobs and the future success of the Alaska LNG project," they said.
"Aside from the conflict of interest that some may see in your continued involvement in any role, we simply seek to restore certainty and stability for the companies investing in Alaska and employing Alaskans," the letter said.
Walker's lawsuit currently sits in the Alaska Supreme Court, with Walker now represented by Anchorage attorney Robin Brena. Shortly after becoming governor, Walker announced that he was selling his law firm to Brena, a friend who, like Walker, has been deeply involved in litigation related to oil and gas issues.
Walker said on Thursday he never intended to slow progress at the field. He said the state could have gotten a better deal if it had not settled.
Rep. Charisse Millett, House Majority leader and an Anchorage Republican, signed the letter along with Reps. Craig Johnson of Anchorage, Steve Thompson of Fairbanks and Bob Herron of Bethel. Herron, the House Majority Whip, was the only Democrat to sign, though he's one of the Bush Democrats who caucus with Republicans.
Millett said the caucus had not heard concerns about the lawsuit from ExxonMobil. But people in the development community, represented by groups such as the Alaska Support Industry Alliance, the Resource Development Council and others, were concerned it sent the wrong message.
"It makes producers, investors and other companies in our state say you have a governor litigating a lawsuit that the state has settled previously," she said. "It puts us in a precarious position."
The letter suggested that Walker submit legislation to address his concerns. He also has administrative powers he can use, and doesn't need to continue the lawsuit to accomplish his goals, Millett said.
Millett said Walker did not respond directly to the letter. However, on Wednesday, Walker met informally with members of the caucus and said he was "was working toward some kind of settlement agreement that would put the state in a position where it wouldn't happen again," she said.
The news of Walker's intent to dismiss the case is welcome, she said, because it's important to "remove any impediment to the gas line project that we can control or the governor can control."