Exxon lawyers are currently in a battle with the state over Point Thomson leases and development plans. Each side is adamant about its position, and that threatens long delays in bringing the major energy resources into production.
I find myself in a quandary.
Point Thomson is critical to the state's economy and fiscal health. I would like to see oil flow into the existing Prudhoe-Valdez pipeline as soon as possible. And I hope Point Thomson gas will be available without obstruction for whichever pipeline is built.
But to what extent can Exxon, the major player, be trusted to finally move ahead and achieve these goals? Or should the state reoffer the leases to others who will develop them?
Exxon's behavior over the past three decades reminds me of something. Every autumn Lucy promises to hold a football for Charlie Brown to kick, and every year she pulls it away at the last moment. Poor trusting Charlie follows through, flies through the air, landing on his back. Sadly, Charlie Brown never learned to disbelieve Lucy's promises.
For decades, Point Thomson has mirrored this interaction.
Exxon and its partners have held the Point Thomson leases for 43 years without developing its resources. Oil was discovered in 1975, but the last well drilled was 25 years ago.
Since 1983, Exxon has promised to diligently explore the unit's leases and begin production. Like Charlie Brown, the state trusted Exxon when it said in 1983 that production would begin in 1988.
Later, Exxon promised to produce in the 1990s.
In 1997, Exxon said it had a plan to produce the oil.
In 2001, the promise was to start drilling in 2006.
The state trusted and Exxon broke every promise. Finally, the state stopped trusting Exxon and in 2005 proceeded to cancel the Point Thomson unit leases.
Bob Bartlett, architect of Alaska statehood, cautioned Alaska's 1955 constitutional convention that resource companies might warehouse the state's resources. In his keynote address, Bartlett warned of danger that "outside interests, determined to stifle any development in Alaska which might compete with their activities elsewhere, will attempt to acquire great areas of Alaska's public lands in order not to develop them until such time as, in their omnipotence and the pursuance of their own interests, they see fit."
He stated that "If large areas of Alaska's patrimony are turned over to such corporations, the people of Alaska ... (would be) ... the losers." Bartlett could have been forecasting Exxon's behavior to now!
So here we are in 2009. Exxon has fielded new plans, promising to spend $1.3 billion for exploration and development. It has engaged contractors and lined up a drill rig. An enormous public relations campaign is under way to sell Alaskans on Exxon's position.
Exxon now threatens extended litigation on Point Thomson. Litigation of Exxon Valdez oil spill punitive damage awards lasted 20 years. But the validity of leases is a state and not federal issue, so such lengthy legal wrangling is unlikely.
So far the state is standing firm, not trusting Exxon to fulfill its plans and holding that the leases at issue no longer exist. If the state prevails, it will open Point Thomson for development by other companies.
And what if Exxon wins?
Can we trust Exxon to fully execute the $1.3 billion plan? What guarantee do we have that Exxon will expeditiously develop the Point Thomson resources?
Will Exxon firmly commit to fully support construction of a gas pipeline regardless of who builds it? Will Exxon provide and ship gas when it's built without delay? Will it guarantee access? Or will it drag its feet again?
Will Exxon stop using threats of nonperformance to get whatever it demands, as it did during gas line negotiations with the Murkowski administration over taxes and other issues?
Or are Exxon's plans merely another legal stratagem to secure its footing on Point Thomson leases and hold them until -- in its omnipotence and the pursuance of its own interests -- it decides to fully develop them?
In view of the record so far, can we now trust Exxon?
Vic Fischer was a delegate to Alaska's constitutional convention and served in both the Territorial Legislature and the state Senate.
By VIC FISCHER