JUNEAU, Alaska (AP) - A judge on Friday ordered Gov. Frank Murkowski to release to the public a secret natural-gas contract with three oil companies.
Juneau Superior Court Judge Larry Weeks agreed with Sen. Hollis French, D-Anchorage, in a written ruling that the governor could not keep the contract proposal confidential any longer.
"It is not clear from whom the contract is being kept secret," Weeks wrote. "The producers know of the contract, legislators have been offered access to it on a condition of confidentiality. There has been no showing of injury if it is released."
However, Weeks wrote in his ruling that the contract should be released only after Exxon Mobil Corp., BP PLC and ConocoPhillips are given notice and have an opportunity to be heard. The time allotted for that notice was not clear.
French said he sued for the contract's public release because he needed to understand how it fit with an oil-tax rewrite the Legislature is considering and which the governor plans to incorporate into the contract.
French called on Murkowski to release the contract within 24 hours and urged lawmakers in the House to slow their work on the tax bill known as the petroleum production tax, or PPT.
"The governor said he would not release a contract until PPT was finished. Now we know he's wrong legally," French said.
French acknowledged that to understand the relationship between the tax bill and the gas contract, the Legislature may have to consider the tax proposal in a special session.
"I think that may be the likely result. The contract can't be analyzed with respect to PPT between now and Tuesday, and it may take a few more days after that," French said.
The regular session ends May 9. Murkowski has said he intends call legislators into a special session the next day and release the contract then, whether or not the tax bill has passed.
The gas contract, a result of two years of negotiations with the three companies, sets the tax and royalty terms for recovering 35 trillion cubic feet of natural-gas reserves on the North Slope.
It is seen as a step toward building a natural-gas pipeline that would run to Canada and markets in the Midwest at an estimated cost of $25 billion.
The governor has said the contract would not be not complete until the Legislature passes the oil-tax bill and therefore the contract could not be released to the public.
Murkowski spokeswoman Becky Hultberg said the governor's office has not had a chance to look over the decision and could not yet say whether Murkowski intended to release the contract or appeal the decision.
"Our attorneys at the Department of Law just received this opinion. They want to take time to carefully review it before any decision is made on the next step," Hultberg said.
Representatives from BP and ConocoPhillips also declined to comment on the judge's ruling.
In a written brief submitted earlier this week, Assistant Attorney General Larry Ostrovsky said until the Legislature passes no final version of the gas contract exists, so there was no contract to release.
Murkowski Chief of Staff Jim Clark wrote in an affidavit that at least 10 provisions of the proposed contract may need to be changed or re-negotiated depending on the Legislature's decision on the tax bill.
In reply, French said there is nothing in the state's Stranded Gas Development Act that forbids the contract from being released until it is finalized.
The governor has "invented the concept of a 'final contract' and then tries to make the release of the contract dependent on that nonexistent status," French wrote.
Ostrovsky's and Clark's argument that the contract is not complete until the oil-tax provisions can be written in does not wash, French wrote. That's because the Stranded Gas Development Act, the law by which the contract is negotiated, prohibits the state from addressing oil taxes.
Weeks agreed. He wrote in his order that the purpose of the Stranded Gas Development Act is to encourage new investment of the state's gas reserves without significantly altering existing oil and gas taxes.
But, Weeks wrote, the tax proposal does alter those existing taxes and keeping the gas contract secret would go against the purpose of the law.
"It is hard to see how the Legislature can be cognizant of the risks and ramifications of the oil tax without seeing the contract that it will affect," Weeks wrote. "The public as well as the Legislature has a right to know of the implications of the proposed contract on the oil and gas revenues of the state and how that will affect fiscal certainty."
Ostrovsky wrote in his brief and Weeks agreed that the state cannot release the document until the three oil companies are given notice and have had an opportunity to be heard on the change in the confidentiality status.
Weeks did not specify how much time should be given to provide that notice, but French was of the opinion that it should be quick.
"Every single one of those people are in the building right now. It shouldn't take very long," he said.
