Alaska Supreme Court rules in favor of ousted state commissioner in case related to 2017 Hilcorp gas leak

The Alaska Supreme Court on Friday ruled that the Alaska Oil and Gas Conservation Commission improperly denied a hearing sought by a former commissioner who believed the agency should have asserted its authority over a 2017 natural gas leak in Cook Inlet.

The six-page decision is a victory for Hollis French, a former commissioner of the agency and a former Democratic state senator. French has argued that the agency should have seen the months-long leak as “waste” under Alaska law, and therefore should have pursued regulatory action against Hilcorp, the company that owned the leaking fuel line.

French sought the hearing in 2019 to address his question of the agency’s enforcement role, long after the leak had been stopped and soon after he was fired from the agency.

During the leak, the three-member commission, also consisting of Dan Seamount and now-retired Cathy Foerster, determined that the agency did not have jurisdiction over it. The U.S. Pipeline and Hazardous Materials Safety Administration, a federal agency, and the state Department of Environmental Conservation ultimately asserted jurisdiction over the leak and Hilcorp.

Gov. Mike Dunleavy in 2019 fired French from the three-member commission, after Seamount and Foerster raised concerns about French’s job performance, including that he neglected duties and was frequently absent.

French has maintained that the disagreement with his colleagues arose over his position that the agency should have asserted jurisdiction over the Hilcorp gas leak.

In spring 2019, the commission said that it had already concluded that it had no “waste jurisdiction” over the gas, in part because the leaking gas had already been extracted from the land, according to the Supreme Court decision. The gas belonged to Hilcorp at that point, the agency had said. Without that jurisdiction, there was no basis for a hearing, the commission decided.

The Supreme Court decision, citing Alaska statute, said the agency has jurisdiction over “all persons and property, public and private,” that are needed to investigate and identify oil and gas waste.

“The commission thus had jurisdiction over the leak at issue,” the decision says.

The agency argued that it properly “denied French’s request for a hearing because it already had investigated the leak and made a waste determination,” the Supreme Court decision says.

But the commission did not properly provide supporting evidence that it had investigated whether the leak counted as waste, the decision says.

“French’s request for a hearing therefore was improperly denied,” the Supreme Court decision says. “The commission has jurisdiction over waste determinations, and substantial evidence does not support its assertion that it investigated and concluded this leak was not waste.”

French, reached on Friday, called the ruling “an extremely important decision from a petroleum conservation standpoint.”

“It restores the agency (to) being the watchdog agency it should be over the waste of the state’s resources,” he said.

Reached Friday morning shortly after the decision was issued, Grace Salazar, a spokeswoman with the agency, did not immediately respond to the ruling.

“We are still reading through it,” she said.

Seamount could not immediately be reached.

Foerster, who retired from the commission in 2019, said she believes the decision is flawed.

“In my opinion, they made the wrong decision,” she said.

French appealed the hearing denial to the Alaska Superior Court in Anchorage. The Supreme Court’s decision reverses the lower court’s ruling, and sends the issue back to the commission for “further proceedings consistent with this opinion.”