Kicking the pipe down the road

The Regulatory Commission of Alaska, or RCA, recently delayed its decision on whether Hilcorp will be permitted to shield its financials from the Alaskan public. “We do not believe as strong a case has been made for confidential treatment of the financial statements submitted in this proceeding,” the commission declared, “and also note numerous members of the public have expressed an interest in disclosure.” Instead of declaring Hilcorp has to make its financials public, like every other owner of the trans-Alaska oil pipeline has over the past 42 years, the commission is giving Hilcorp another chance to prove that transparency would harm its profit margins.

The Alaska Public Interest Research Group, or AKPIRG, applauds the RCA for its thorough investigation into this sale, but questions its standard of judgment. Unless the commission believes that the financial well-being of Hilcorp is more important than that of the state of Alaska, the public has a clear, overwhelming interest in having access to the basic finances of the most important company owning the pipeline system. There are numerous issues of far less significance that the commission has ruled must be kept accessible to the public.

There was never a serious legal question that Hilcorp’s desire to hide its finances from the public was more important than the Alaskans’ right to transparency. Basic transparency matters to ensure Hilcorp has the capacity to clean up the legacy oil assets it is purchasing. Does Hilcorp have the financial wherewithal to clean up a major spill, like the Exxon Valdez? Will Hilcorp really be able to fulfill its obligations to the people of Alaska and pay to remediate legacy oil infrastructure when it is decommissioned? For these questions and many others, the public not only needs transparency, it needs the RCA to go about its normal due diligence by opening a public hearing into this unprecedented transfer of assets. Such a standard review is essential to ensure Hilcorp has enough money to clean up a major spill and that the state’s money for pipeline dismantling, removal and restoration is properly set aside and protected for the future of Alaska.

The commission has the exclusive authority to ensure the security of dismantling, removal and restoration funds when the pipeline is decommissioned. With this deal, Alaskans will be placing their trust in two firms: one multinational firm which is selling all its property in the state and which the commission may have no jurisdiction over — BP — and a tiny private firm — Harvest Alaska — which currently has 21 employees with the future obligation to spend billions to clean up legacy infrastructure. Currently, only Harvest Alaska — not the larger Hildebrand family of companies which includes Hilcorp — is on the hook for pipeline cleanup. This is a crap deal for Alaskans, who will get stuck paying to clean up their mess unless we stand up and demand accountability.

It’s clear what must be done: Alaskans need a proper vetting and review of this deal with a public hearing, Hilcorp must not be allowed to hide its basic finances from the public and the commission should open a new docket to ensure remediation funds are properly escrowed so Alaskans can one day restore our lands and waters.

AKPIRG has never taken a position on whether or not the deal should be approved, only that the deal is reviewed in an open, transparent and participatory fashion. The RCA has made commendable steps in that direction, but still has not fulfilled its obligation of protecting the public’s interest. The Legislature has held a single hearing; the governor’s appointed committee has never met. It is confusing to see so little leadership from our elected representatives, who are meant to represent all Alaskans, not just the wishes of the oil industry. The RCA will rule on transparency on March 12, and I hope that decision will ensure a bright future for Alaska — not just short-term profits for Hilcorp.

John M. Kennish is retired professor of chemistry from UAA who taught Analytical and Environmental Chemistry for more than 35 years. He is currently a board member of AKPIRG and the chair of the Science Advisory Committee of Prince William Sound Regional Citizens’ Advisory Council.

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