GUEST COMMENTARY: Listen to Alaskans on Hilcorp deal
Former Natural Resources Commissioner John Shively disagrees with my call for a public charter with Hilcorp, and I welcome his criticism. His letter is precisely the kind of public discourse and debate Alaskans should be having. We should be asking: how do we protect Alaska’s public interest in the proposed BP-Hilcorp deal?
Mr. Shively contends that citizens need not be concerned about the BP-Hilcorp deal. It’s “merely” a stock transaction where Hilcorp is “stepping into BP’s shoes.” But some historical context reveals a far more complicated and problematic situation.
The proposed deal is unprecedented in Alaskan history. Never before has the dominant owner transferred its shares of the Trans-Alaska Pipeline System. This is not “simply” a private business deal; TAPS is central to Alaskan public policy, environmental protection and the public interest. This is the largest business deal in a generation in Alaska and it demands a level of oversight commensurate with its unique nature.
It’s inaccurate to conflate BP and Hilcorp. As the Prince William Sound Regional Citizens’ Advisory Council testified, the sale would transfer “operational control over TAPS from one of the world’s largest and most well-resourced oil companies to a mid-sized, privately held company with no record of successfully and safely operating comparable facilities.”
BP has a reputation as one of the most accountable oil companies, while Hilcorp has earned a reputation for secrecy. Hilcorp does not even have a Wikipedia page and they seek to control the most important hydrocarbon system in U.S. history.
Not only has Hilcorp never operated a system as complex as TAPS, its history of managing pipelines is alarming. Hilcorp (or more specifically, its wholly-owned midstream subsidiary, Harvest, LLC) has the dubious distinction of having more accidents than nearly any other company operating more than 300 miles of pipeline.
Mr. Shively asserts there is already sufficient regulatory oversight, but the truth is Alaska’s regulatory agencies are underfunded and overworked. The Hilcorp deal occurs at a moment when PWSRCAC has warned of a “steady erosion in regulatory oversight, staffing, funding, and coordination among many of the federal and state agencies” responsible for oil safety.
The actions of the Dunleavy administration only accentuate concerns about responsible oversight. Gov. Michael J. Dunleavy fired Hollis French from the Alaska Oil and Gas Conservation Commission after French insisted the commission should extend its jurisdiction over a 2017 leaking Hilcorp pipeline.
French’s firing came in the wake of a political donation from Hilcorp’s CEO, Jeff Hildebrand, to Dunleavy’s campaign. The Dunleavy Administration has since joined a lawsuit defending Hilcorp’s seismic blasting and harassment of marine mammals. Is this the independent oversight Alaskans should be proud of?
Mr. Shively’s most troubling argument is that regulators will handle the deal and citizens need not be involved. BP, Hilcorp and most state agencies (the Regulatory Commission of Alaska being the exception) have acted as if this were a “done deal”. This deal will affect all Alaskans for decades to come and Alaskans deserve an opportunity to be heard.
Our regulatory agencies are supposed to serve the public interest — a function they can only perform by listening to and being accountable to citizens. As the Alaska Oil Spill Commission argued, “Alert regulatory agencies, subject to continuous public oversight, are needed to enforce laws governing the safe shipment of oil.” Where are the public hearings and testimony at our state agencies?
Mr. Shively furthermore argues that Alaskans should not “shackle” this deal with demands of accountability and transparency, which might make the transaction “uneconomic.” But Alaska’s long history as a resource colony demonstrates why corporate accountability is so critical. Too often companies have extracted Alaskan resources and left behind a mess for the public to clean up.
As Gov. Jay Hammond argued, Alaskans should prevent “uneconomic development” — development that cannot pay its own way. Is it so much to ask that Hilcorp demonstrate it has the assets to cover its liabilities?
If Mr. Shively finds my proposal for a public charter with Hilcorp problematic, I welcome his criticism. We may disagree, but let’s have a robust public debate about the merits of the proposed BP-Hilcorp deal and listen to all Alaskans.
Philip Wight is a policy analyst for the Alaska Public Research Interest Group. He recently completed his Ph.D. dissertation on the history of TAPS.