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Palin emails detail relationship with oil industry watchdog

  • Author: Patti Epler
  • Updated: September 27, 2016
  • Published June 12, 2011

Sarah Palin, who took on Big Oil while serving as Alaska's governor, developed a close relationship with the oil industry's most visible activist in the state, according to emails released Friday.

Unlike other governors, Palin took seriously the contentions of longtime oil industry critic Chuck Hamel, a former Virginia oil shipper who in the 1980s began a decades-long effort to document corruption and wrongdoing by Alaska oil producers. Through the years, Hamel developed a network of industry whistleblowers, uncovering all kinds of problems with the trans-Alaska oil pipeline and the oil fields on Alaska's North Slope.

Palin might have been the only governor to take Hamel seriously; previous administrations had written him off as a gadfly. On Friday, the state released more than 24,000 pages of emails from Palin's time at the helm. The emails document her relationship with Hamel, along with their quest to get to the bottom of safety allegations in the state's aging oil fields.

The emails show Palin met with Hamel on a trip to Washington, D.C., and instructed her staff to talk with him and consider his allegations. She directed the Petroleum Systems Integrity Office, which she'd established, to travel to Prudhoe Bay and look into concerns Hamel was raising over fire-suppression systems, among other things.

"I was impressed with her," Hamel said Saturday in an interview from his home in Washington state.

He says he kept in touch with Palin mainly via email until fall 2008 when he was told she was scaling back her email correspondence after she'd been picked to run for vice president with Arizona Sen. John McCain and reporters began scrutinizing her emails.

RELATED: Alaska oil watchdogs, some things never change

Palin's efforts to wrench more money from Alaska oil companies is well documented, from her support of the controversial tax hike on oil companies (Palin's administration called it Alaska's Clear and Equitable Share or ACES) to continuing a policy to pushing for Exxon Mobil Corp. to develop its state leases at the Point Thomson oil and gas field.

She took office about eight months after corrosion in a BP pipeline at Prudhoe Bay caused the largest oil spill in North Slope history. She set up the Petroleum Systems Integrity Office, or PSIO, to add another layer of assurance that the oil companies would address problems with aging oil fields. She also embarked on what was supposed to be a comprehensive "risk assessment" of Alaska's oil infrastructure.

Taking on Big Oil

Hamel says he had met Palin years before, soon after she left her position in early 2004 as a member of the Alaska Oil and Gas Conservation Commission, a state board that regulates oil field operations. The board was a favorite target of Hamel, who over the years raised myriad concerns about the industry from fraud to worker safety. The longtime watchdog has generally considered state officials, including the Oil and Gas Conservation Commission, to be tools of the oil companies.

Hamel says he considered Palin a friend. So when she was elected governor it was natural to continue pressing her on his issues.

In February 2007, Palin staffer Kari Spencer wrote to her boss: "Chuck Hamel has been calling nonstop to try to get an appointment with you while you are in DC. He says he has important FBI information about corruption at Prudhoe Bay that you need to know about."

"I returned a call - told him (Joe) Balash would take his call," Palin wrote back to Spencer and John Katz, the state's longtime Washington, D.C., staffer.

In March 2007, Hamel raised concerns about corrosion and its effects on fire-suppression systems at Prudhoe Bay in a detailed letter to U.S. Rep. John Dingell, then chairman of the House Energy and Commerce Committee and a longtime political ally of Hamel's. He gave Palin a heads-up, and applauded her in the letter for her "plans for effective oversight" of North Slope problems. The letter prompted the PSIO chief to personally visit the Slope, along with another staffer.

Palin continued to be concerned by staffing cutbacks on the North Slope, especially in maintenance and corrosion prevention operations. In September 2007, she fired off emails to Joe Balash, asking questions about a rumor that more than 100 workers were going to be fired the next day.

"Please don't take my asking questions as being agitated," Palin wrote. "Just want to know what's going on and not wanting to react to, as you characterized this, a third-hand statement."

"I will continue to ask questions," she informed him.

'We keep telling him we're on his side'

Hamel continued to bug the governor's office, her staff and other agency officials as he pressed for more action on the concerns he was raising about the oil companies, most of which were coming from workers in the oilfields that he'd cultivated as sources over the years.

Palin chief of staff Mike Tibbles wrote to the governor in late December 2007 that he'd sent inquiries to the state fire marshal after looking over "many pages" of material he'd received.

"His allegations against BP are strong and his criticism of DPS and DNR is unforgiving," Tibbles wrote.

Palin wrote to other top staffers the same day: "Re Hamel - we keep telling him we're on his side. He'll either believe it or he won't. At some point I'll talk to him again but I don't want us to waste time trying to convince him if he's only hearing what he wants to hear."

A week or so later, as the Alaska Legislature prepared to go back to work and take up the issue of oil taxes, Palin feared a political attack by the oil companies who were arguing that budget cuts and layoffs on the North Slope were directly linked to raising oil taxes, one of her big political coups. Her staff prepared a counter attack, in part aimed at reminding the public of her strong oversight of the industry.

In February 2008, Palin learned that legislative leaders, in particular Rep. Mike Chenault, then the chair of the House Finance Committee, were planning to cut funding for the PSIO as well as shortchange legal action she was working on regarding corrosion. When Hamel asked to meet with her while she was in Washington, D.C., for a meeting of the National Governors Association, she took him up on it.

"I'm shocked and disappointed Chenault's taking out PSIO positions and corrosion lawsuit funds out of my budget," Palin wrote to press aide Sharon Leighow.

"I'm back in DC speaking with Cheney (sat with him the entire State dinner last night, will try to speak w/Bush today … speaking with national reporters and all these governors all about AK's proof that we can provide sound oversight of resource development, as evidenced by PSIO, lawsuits to hold industry's feet to the fire … and here while I'm away I find out the legislature may undermine those efforts?"

Hamel had called Katz to see if he could meet with Palin. "I want him to help me pressure leggies to get PSIO positions back in my budget," she wrote, and invited Hamel to visit her at the Marriott where she was staying.

Hamel says he and his wife, Kathy, met with Palin to discuss the North Slope. He remembers it was the same day she had lunch with John McCain, and she was chatty about that.

On a later trip back East, Hamel says, Palin and her husband, Todd, met privately with him to talk about his concerns with BP and Slope operations. He says he got the sense at that time the governor was in a bit of a bind because Todd, a BP employee, worked in one of the gathering centers that Hamel was hearing had serious problems.

"It was a good mtg," Palin wrote to top staffers about the first session. Hamel's "very frustrated tho that he believe (sic) BP snookers PSIO into believing they've got it all under control."

Gov. Sean Parnell, who took over for Palin when she resigned in July 2009 and was elected to his own four-year term in November, has moved away from Palin's policies when it comes to the oil industry. He wants to revamp ACES, cutting taxes on the oil industry by an estimated $2 billion a year. His administration is perceived as being much more friendly to the industry than Palin's, particularly in terms of staffers he's put in place since he was elected last year.

Parnell also seems less obsessed with staying on top of oil industry problems on the North Slope. The comprehensive risk assessment started by Palin was scaled back to an analysis of the history of spills on the Slope. And although the reduction in effort was started while Palin was still governor, the report was slowed under Parnell's watch and not finished until earlier this year, months later than anticipated.

A separate report by the PSIO -- a "gap analysis" that was expected to address shortcomings in state oversight -- was due last year as well but still hasn't been released.

Contact Patti Epler at patti(at)alaskadispatch.com.

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