A crowd of more than 50 people rallied in the rain outside Boney Courthouse in Anchorage on Tuesday, supporting the city of Valdez in a lawsuit demanding transparency in the state’s major oil deals.
“We deserve to know more,” Fairbanks Climate Action Coalition organizer Tara Chrisman said through a megaphone. “We want no more secrets. No more spills,” she said as the crowd chanted back. “No more secrets, no more spills.”
Lawyers for Valdez went before the Alaska Supreme Court Tuesday to argue their case, centered on Hilcorp, a privately-owned Texas oil and gas company. Hilcorp was not required to make financial disclosures when the company bought BP’s Alaska assets in 2019.
Fairbanks Climate Action Coalition and the government watchdog Alaska Public Interest Research Group say that raises concerns about who will pay for cleanup after aging oil infrastructure is decommissioned or in the event of an oil spill.
“It’s not about undoing the deal. The city of Valdez has specifically said that that’s not their intent,” AKPIRG energy analyst Alyssa Sappenfield said. “It’s about the people’s right to transparency.”
The lawsuit, originally filed in 2020, argues that the Regulatory Commission of Alaska shouldn’t have allowed Hilcorp to keep its financial statements confidential during its $5.6 billion acquisition of BP’s Alaska assets.
“Alaskans in the city of Valdez — a municipality that … has massive infrastructure at tremendous risk [were] denied basic financial information about the owner of a publicly regulated facility,” Robin Brena, a lawyer representing the city, told justices. “This cannot stand. Alaskans in Valdez should have a voice in a fair process.”
Valdez and its allies say without a clear picture of Hilcorp’s financial health, there’s no way to know whether the company has the resources to maintain the oil infrastructure it bought or respond to potential oil spills.
“We need proof that they are able to clean up after themselves,” said Maureen McDonald of Hooper Bay, who attended the rally with her daughter. She remembered the destruction of the 1989 Exxon Valdez oil spill and said she doesn’t trust that oil companies will take full responsibility for the cleanup.
“We want proof, because [their] word is worthless,” she said.
Hilcorp has a track record of safety and environmental violations. Last year, the company was fined $180,500 for failing to respond to dozens of methane leaks in Cook Inlet and on the North Slope. A Hilcorp spokesperson did not respond to a request for comment.
Phil Wight is a policy analyst with AKPIRG. He said while the lawsuit won’t change the BP sale, it could have an impact on future oil deals.
“This case is really about precedent,” Wight said. “It’s about what happens when Exxon Mobil leaves the state and they sell their assets. We want the court to very clearly tell the RCA you cannot permit companies to keep their finances secret based on these kinds of obscure provisions.”
Lawyers for Hilcorp, BP and the RCA focused on procedural objections to the city’s case. They said the city didn’t take the correct steps to file a formal complaint with the RCA at the time of the BP sale.
“I understand your procedural objections, but when you get right down to the substance, I can’t think of anybody that’s more concerned about this transaction,” Justice Joel Bolger pushed back.
“Valdez’s argument is hypothetical,” Hilcorp lawyer Anne Marie Tavella answered, arguing that the city was not specifically harmed by the deal, and therefore didn’t have standing to make objections to it. “It may be adversely affected at some point in the future depending on what might happen. But that’s not factual aggrievement,” Tavella said.
Following the hearing, Supreme Court Judges are deliberating the case — a final decision could take months.
Kavitha George is Alaska Public Media’s climate change reporter. Reach her at kgeorge@alaskapublic.org. Read more about Kavitha here.
