On Tuesday, the Alaska Supreme Court will hear oral arguments in a case challenging state regulators’ decision to allow Hilcorp to keep financial information related to its 2020 purchase of BP’s Alaska oil and gas assets a secret.
The case is brought by the city of Valdez and is helmed by storied oil and gas attorney Robin Brena, who successfully argued landmark litigation over the valuation of the trans-Alaska Pipeline System and backed the 2020 voter initiative to raise oil taxes. It argues that it needs to be able to assess the information to determine whether Hilcorp really has the financial fitness to run the 800-mile pipeline system that ends in a tanker terminal in Valdez.
“Through this appeal, Valdez is ultimately seeking access to the core financial documents held secret by the RCA that underlie the RCA’s regulation of TAPS and (the oil companies’) assertion that they are and continue to be fit, willing and able to operate TAPS,” argues the city’s brief, adding that it also is seeking opportunity use those documents to shape ongoing regulations of the TAPS operations. It doesn’t seek to reverse the sale, only add potential new sideboards to it.
The case has drawn support from transparency advocates, who argue that shielding Hilcorp’s financial information undermines the public confidence in the system and the trust that the TAPS can and will be safely operated and maintained through its remaining life. That’s also highlighted in Valdez’s appeal.
“The transfer of the largest ownership interest in TAPS to a privately held company based on financial documents held secret from the public by the RCA denies Valdez and all Alaskans the opportunity to meaningfully comment or engage in RCA’s administrative section,” the city continues in its brief. “(Regulators’ interpretation of state law) used to keep these basic financial statements from the public is an unconstitutional interpretation so extreme it eliminates the rights of all Alaskans to review virtually every public document relating to the state regulation of pipelines in Alaska as well as the rights of the courts to meaningfully judicially review the final orders of the (regulators) relating to those pipelines.”
But the Alaska Supreme Court likely won’t be weighing in on issues of secrecy quite yet, as the case largely revolves around whether the city of Valdez has the standing to challenge regulators’ decision and, if so, whether it has gone through the appropriate channels before resorting to this lawsuit. A Superior Court Judge ruled in 2021 that the city had neither the standing nor had it exhausted the regulatory process with the Regulatory Commission of Alaska.
This appeal is seeking to overturn those findings.
The brief filed by Hilcorp defending the Superior Court’s decision sums up their view of the case, noting that even though Valdez signaled its intent to intervene in the sale it never did.
“Valdez’s appeal fails because Valdez made no effort to use the RCA’s regulations and procedures to obtain the very involvement it now complains it was denied,” argues the Hilcorp briefing. “The doctrines of standing and exhaustion of administrative remedies are particularly applicable to this case as the crux of Valdez’s appeal is that Valdez desired greater involvement in the RCA’s process while Valdez simultaneously failed to avail itself of opportunities to be more involved in the process. … The RCA did not foreclose any opportunity for Valdez to take action to intervene—Valdez simply failed to act.”
The state also argues that the case is moot because the sale has already been completed and that Valdez held no direct interest in the sale and suffered no harm.
Valdez argues those findings were wrong and that the underlying issue of oil companies keeping their financial information out of the public eye is of critical public interest and is likely to continue to be an issue in Alaska, arguing it’s still important even though the sale has been finalized.
The oral arguments are scheduled for 1:30 p.m., June 27 at the Boney Courthouse in Anchorage. It will be live-streamed online by Gavel Alaska here.
The Alaska Public Interest Research Group, which filed an amicus brief supporting Valdez’s position, will be holding a rally outside the courthouse at noon. In its amicus brief, AKPIRG raised the issue of what will happen once the pipeline eventually shuts down.
“Relying on ‘corporate assurances,’ Alaskans are essentially trusting that these companies will always have the capital to pay the billions of dollars required to dismantle TAPS and restore the land to its natural condition,” it explained. “This is a major assumption with tremendous public interest implications, as the viability and accessibility of (dismantling, removal and restoration) funds are essential for employing thousands of Alaskans and ensuring the health of the state’s economy beyond North Slope oil.”
Matt Acuña Buxton is a long-time political reporter who has written for the Fairbanks Daily News-Miner and The Midnight Sun political blog. He also authors the daily politics newsletter, The Alaska Memo, and can frequently be found live-tweeting public meetings on Twitter.
