Ousted state commissioner French to argue his case before regulators over Hilcorp gas leak

Hollis French has a complicated relationship with the Alaska Oil and Gas Conservation Commission, and he’s about to add to it.

The former Anchorage state senator and Democratic candidate for lieutenant governor was appointed to lead the powerful agency that regulates subsurface oil and gas work in 2016 by then-Gov. Bill Walker.

French’s tenure on the three-member panel, though, was short-lived.

He was removed from the commission by Gov. Mike Dunleavy in January 2019, roughly a month after the newly minted governor took office. AOGCC commissioners are rarely fired because it must be done with cause, a core enabling provision for the agency designed to attract industry expertise over partisan appointees.

Backed by testimony from longtime commissioners Cathy Foerster and Dan Seamount, who accused French of shirking responsibility and being frequently MIA from the commission’s downtown Anchorage office, Dunleavy claimed French was derelict in his duties as the agency’s chairman. Now retired, Foerster preceded French in holding the AOGCC gavel. Seamount continues to serve on the commission.

Dunleavy appointed Jeremy Price, who was the governor’s deputy chief of staff at the time, to replace French in October 2019.

For his part, French insists the office discord was mostly rooted in simple personality and policy differences — the commissioners’ testimony from the time reads like something out of the Hatfields and McCoys — and that while he did not have a strict office regimen, he often worked remotely and completed all of the necessary work.

Within a month after being fired, French returned to the AOGCC with a petition. He wanted the commission to investigate whether Hilcorp Energy’s months-long natural gas leak from a 50-plus-year-old pipeline on the floor of Cook Inlet was a waste of the state’s gas resources. French believes it was.

The pipeline supplied fuel gas to platforms in the Middle Ground Shoal field in the central part of the Inlet.

Hilcorp Alaska is the dominant player in the Cook Inlet basin and the major natural gas supplier to Southcentral utilities.

The gas leak was one source of disagreement between French, Foerster and Seamount when he was on the commission, as well. Foerster and Seamount outvoted French, contending the agency, which typically deals in the highly technical realms of well drilling and resource production, did not have jurisdiction over the leak and therefore could do nothing about it.

The commission similarly denied French’s petition for a hearing on the matter in 2019. The commissioners alleged an investigation was conducted while the leak was ongoing and it was concluded that because the gas had been metered and removed from the production facilities the leaking gas could not be waste.

Undeterred, French took his petition to Alaska Superior Court, where a ruling was issued in favor of the commission. However, the Alaska Supreme Court was much more amenable to French’s arguments.

In early September of this year, the state’s high court issued a six-page order in favor of French and sent the case back to the AOGCC for Price and his colleagues to deal with. The subsequent hearing is scheduled for Wednesday.

French said in an interview that the brevity of the Supreme Court order exemplifies how easy a case it was for the five-justice court to decide.

Justice Daniel Winfree wrote for the justices that the commission’s argument that it lacked jurisdictional over the leak “puts the cart before the horse” in that the AOGCC has the purview to investigate “all persons and property, public and private” in conducting its business.

Accepting the AOGCC rationale would mean the commissioners could usurp the agency’s enabling statute by deciding substantive matters in private meetings before using the lack of jurisdiction argument in other matters, according to the court.

The court also questioned whether or not the commissioners opposed to hearing French’s petition did their due diligence before making their decision.

“The commission’s statements about having investigated whether the leak was waste are wholly unsupported,” the September order states simply. “The commission’s dismissal order contains several factual statements about the alleged investigation and waste determination, but there is no supporting evidence in the administrative record.

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

In late October the court also ordered the state to pay French’s court fees of $596.82. An attorney by trade, French represented himself.

Attorneys asked about the circumstances of the case said the commissioners’ big error was in not granting French’s initial hearing petition. If they had allowed him to plead his case as a member of the public and then simply chose not to act, French would’ve had a much more difficult time succeeding in court, they said.

French was not so much concerned about taking action against Hilcorp, but rather making sure the AOGCC maintained its authority, he said. His time working on the Cook Inlet platforms early in his career also gave him valuable background into the industry, according to French, which helped in this case.

“No state agency with a shred of self-respect would give up its power, yet this state agency was falling all over itself to give away its power,” he said in an interview. “The agency’s position was extremely narrow. To me, it was just about preserving, really for the future, some future commission’s power to enforce rules against waste.”

Alaska, with its unique public ownership of oil and gas resources, has some of the strictest rules against resource waste in the country.

“They never thought about what would happen if this was a pipeline running down the Park Strip in Anchorage or near their house,” French said.

A Hilcorp Alaska spokesman declined to comment. AOGCC chair Price also did not respond to questions in time for this story.

French said his expectations are “fairly low” for Wednesday’s hearing, particularly given he has already achieved his main objective.

“This should be more of a learning opportunity than going back and trying to get some money out of Hilcorp,” he said, semi-seriously suggesting Hilcorp be tasked conduct its own sort of community service by offering a few of the company’s engineers to volunteer at the University of Alaska Anchorage’s popular Alaska Native Science and Engineering Program. The program encourages middle and high school-age Alaskans to pursue careers in the science and technology fields.

Elwood Brehmer can be reached at elwood.brehmer@alaskajournal.com.