Politics

Legislators face pledge of secrecy over details of Alaska gas line

FAIRBANKS -- The state and the oil companies will soon be asking legislators who want to know the inner details of negotiations on Alaska's proposed gas line megaproject if they can keep a secret.

It will come in the form of a confidentiality agreement that lawmakers will be asked to sign if they want to see information that the state and the oil companies believe should be kept out of the public eye.

As time passes, this could put legislators who sign the agreement in a bit of a bind because they won't be free to elaborate on specifics with constituents. Fairbanks Rep. David Guttenberg said he would have a hard time signing any such pledge because it would be a promise to not discuss key decisions for the state. But without signing it, legislators would be limited to speculation.

It's not clear yet just how much gas line information will be open to legislators who don't sign the pledge and to the public, but competing demands for transparency and confidentiality promise to be a hallmark of the process going forward.

Legislators endorsed the secrecy provision in the Parnell administration gas pipeline bill they approved last spring. The state submitted a draft of the pledge to legislative lawyers Friday, but it has not been released to the public.

Disclosing the details of "commercially sensitive contracts and agreements" would harm the state by possibly leading to lower prices for the state's natural gas, Natural Resources Commissioner Joe Balash said in a letter to legislators last week.

In approving the gas line bill, the governor and lawmakers said they needed a process under which legislators and those who work for them can find out what is going on, with the stipulation that they refrain from broadcasting it to the world.

ADVERTISEMENT

"Legislators and their staff will need to sign the agreement and complete confidentiality training prior to the sharing of confidential information and any agreements to which DNR and the Department of Revenue are a party," Balash said.

In a joint meeting of the House and Senate resources committees Monday, Balash said the state and the oil companies have "developed protocols and training that personnel on the executive branch side are required to go through before executing an agreement and having access to confidential information."

He said with the state as an investor in the project, it has to take precautions in dealing with potential contractors and buyers. There are times when public disclosure is not in the public interest.

"The buyers are going to take every opportunity they can to drive the sales price lower," he said about the value of state-owned natural gas. "And so for a lot of very good reasons there are going to be matters that we will discuss with you in executive session."

Balash said the goal is to protect "Alaskans' interest in the resource and ultimately in the treasury," with confidentiality covering contract negotiations and implementation of contracts.

To that end, the state needs "to ensure that the proper firewalls are in place between staff who will oversee proprietary work and staff who will be primarily responsible for regulatory oversight in the future."

The department finished its internal rules in early September, he said, and the legislative branch has been asked to sign off on similar procedures.

That the state, as a partner with the oil companies, would have to adjust its role has long been discussed and debated.

In 2002, a revenue department study said that if the state partnered with the oil companies, it would be unable to use any information it gained from that relationship in tax or regulatory proceedings. "Confidential information set out on the table would have to remain at the table," the report said.

That report noted how BP had proposed selling its share of the trans-Alaska oil pipeline to the state in 1977 and again in 1978, but the Hammond administration "declined to pursue the proposal, in part because state officials believed state ownership would unacceptably increase the conflict between the state's regulatory responsibilities with respect to the pipeline operation and the state's interest in maximizing public revenue."

The 2002 report said the state would get information from a gas line partnership, but it could find itself "in an untenable legal and ethical position trying to balance the informational needs of the state government with its partnership responsibilities."

Dermot Cole

Former ADN columnist Dermot Cole is a longtime reporter, editor and author.

ADVERTISEMENT