Pandering to Alaskan oil tradition, Hilcorp Alaska, LLC and its affiliate Harvest Midstream, LLC recently announced new principal sponsorship of the 50th Anniversary Iditarod race. This is a tempting feel-good story about them supporting the “indomitable spirit of Alaska.” In reality, it is obvious that Hilcorp is trying to rebrand from its well-deserved “Spillcorp” nickname and buy Alaskans’ trust via the world’s most famous sled dog race — nice PR, if you can afford it. But no amount of sponsorship can hide a record of polluting Alaska’s environment, endangering workers and eluding responsibilities that come with the privileges of natural resources.
If Hilcorp and Harvest are both contributing like ExxonMobil did (before severing its iditarod sponsorship earlier this year), that is at least $250,000 each. Those dollars are expendable partly because the privately held Texas companies are not subject to the same state corporate income taxes that BP paid for decades. Alaskans will lose more than $30 million per year in state revenue in perpetuity because of this astounding loophole.
Beyond scrimping taxes, Hilcorp’s environmental record reads like a bad rap sheet. In the same week that the Regulatory Commission of Alaska (RCA) controversially approved the BP-Hilcorp sale last December, Hilcorp reported a nearly 8,000-gallon underground line leak in the Cook Inlet. In New Mexico, Hilcorp’s affiliate Harvest was fined for not reporting a major spill into a waterway for 44 days. This April, another serious leak on the Cook Inlet MFS pipeline occurred under Hilcorp’s management. Federal officials at the Pipeline and Hazardous Materials Safety Administration (PHSMA) finally had enough, ordering Hilcorp to shutter and replace the aging line.
Lately, Hilcorp has repeatedly been identified as a major emitter, with almost 50% more methane emissions from all of its operations than fossil fuel mega-producer ExxonMobil, though it pumps far less oil and gas. While Hilcorp might hedge or distance its lower 48 woes from its Alaska operations, these endemic issues and emissions come full circle with Hilcorp as the dominant owner of the Trans Alaska Pipeline System (TAPS), a pipeline seeing rising threats from thawing permafrost and rising flood waters.
It is easy to see how they can coast below the radar. Recently, a coalition of global investors representing trillions of dollars specifically pointed to the BP-Hilcorp deal as the poster child of secrecy.
Alaskans remember Hilcorp’s dogged, years-long fight to keep the public in the dark about any meaningful details in its takeover of BP’s Alaska assets, despite public outcry demanding transparency in the largest Alaska business deal in a generation.
After months of deafening silence, the RCA quietly approved the Hilcorp-BP transfer of interests in the trans-Alaska oil pipeline, Alyeska (operating company for the pipeline system) and the Valdez Marine Terminal. Unfortunately for Alaskans, the RCA did so in a closed and secretive manner — conveniently declining to open an actual evidentiary proceeding as they do in matters far less consequential and refusing to disclose basic details about Hilcorp’s financial wherewithal.
The RCA’s approval of Hilcorp’s takeover minimized multiple findings of environmental and safety violations by other regulatory authorities and entirely omitted consideration of a tanker spill like the 1989 Exxon Valdez catastrophe — despite the RCA’s duty to review Hilcorp’s fitness. Critical to transparency, the RCA also contorted precedent to create a new, special-made confidentiality loophole for Hilcorp that permits its basic financial documents to be kept secret even though no other owner of TAPS has ever been allowed to do so. Regardless of whether Hilcorp should have received approval of its BP takeover, at minimum, the RCA should have followed fundamental practices of good governance and transparency. Amid an extremely volatile moment in the oil industry, it is impossible for everyday people, legislators or subject matter experts to know if a prudent decision was made because no public oversight was permitted. Alaskans can’t afford disaster to tell us to do better.
Given the RCA’s regressive ruling on transparency, the City of Valdez — which has more at stake in who owns the pipeline system and its terminal than any other community — filed an appeal to the decision on constitutional and statutory grounds. The Alaska Public Interest Research Group (AKPIRG) has supported the City of Valdez’s appeal with an amicus brief as this case goes now to the Alaska Supreme Court.
In any conversation about Hilcorp and the “indomitable spirit of Alaska,” it is everyday Alaskans and our communities that will persevere. Just ask around — try the sentinels at Cook Inletkeeper or even former Alaska Oil and Gas Conservation Commission (AOGCC) commissioner Hollis French, recently vindicated by an Alaska Supreme Court ruling that the AOGCC in fact had jurisdiction over a 2017 Hilcorp natural gas leak and French’s request for hearing to better investigate was improperly denied. Hilcorp’s increasing influence on and consequences to our communities, lands, and collective future demand that Alaskans stay vigilant.
Hilcorp can’t buy our trust. They need to earn it by honestly engaging with Alaskans, not just splashing their name on a well-publicized banner.
Alyssa Sappenfield is Alaska Public Interest Research Group’s energy analyst. She lives and works on the lands of the Dena’ina people in Anchorage.
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