6-7-13 Notes From The Road – A ‘Well Intentioned’ But Dangerous Federal Process

For those aspiring to direct activities of an instate gas pipeline, here is a link to follow: The State of Alaska, Office of the Governor seeks qualified individuals to serve on the inaugural governing board of the Alaska Gasline Development Corporation, a state corporation responsible for advancing a large-scale natural gas pipeline project.  -dh

When A New DOI Acting Assistant Secretary Came To Alaska To "Listen"

by

Dave Harbour

(For background.  In early September 2010 Alaska experienced the second "listening session" during the course of the Deepwater Horizon investigation.)

Sample of testimony provided by supporters of Alaska OCS oil and gas activity. My name is Mary Ann Pease (NGP Photo). I am a business owner with a focus on oil, gas and energy consulting.   Thank you for holding the listening session.    We all want to make sure that our natural resources are developed in a safe, reliable and economically feasible manner.   The Arctic represents a vast potential source of both resources and opportunity.  Exploration and development in the arctic afford a significant remedy for advancing energy independence.  It also will present new and expanded opportunities for other industries such as fishing and shipping.  The administration needs to work to advance the ability of Americans to use arctic resources and not stifle, frustrate and thwart development opportunities. Obviously there are challenges to working in an arctic environment.  But, those can be addressed with a rational and considered permitting process.   What is not needed is some kind of moratorium on use of the arctic while innumerable studies are conducted.  Governmental agencies love to do studies, because it allows them to forego the decisional process, provides a shield to support those opposed to development, and puts off any actual substantive work to advance a project.  Agency objectives should be to determine how to prudently develop resources, not stifle a defined process with one study after another.   Set out what the requirements are for specific development activities.  Then adhere to the defined process.  There may be legal and other challenges, but the agency has to support and defend the process it has devised.  Otherwise there is no certainty, no structure, and no way to advance a project.  And the agency needs to actually do its work.  Plans that are submitted have to be reviewed and proper commentary provided.  It does no good to discover after a problem develops that the plan addressed species that only live thousands of miles from the project area.   Industry and applicants have to meet the defined permitting standard, but the governmental agencies have to objectively and thoroughly review submittals and provide appropriate comments and directives.   Arctic development has been totally frustrated by a labyrinth and undefined permitting process.  Energy resources from the arctic are key to energy independence for the US and increasing employment opportunities in an area with chronic unemployment. Define the permitting and approval process with realistic and fair conditions to protect the environment and traditional uses of the arctic.  The arctic is remote, but it isn’t isolated, and its resources are an integral component to satisfy increasing domestic demand.   The need for a diverse market basket of energy sources is more critical now than ever.  Energy Consumers need the optionality of affordable energy to continue economic prosperity.    The villages and communities here in Alaska are constantly hurt by the high cost of energy and greatly rely upon the revenues that come from oil and gas development in our State for their existence.   Alaska has the most stringent regulatory and permitting requirements in the world.  We can responsibly develop our resources here in Alaska.  The OCS standards that your agency and others may be reviewing need to be durable and cannot cause delay, excessive cost and should not stall development.   Our objective and focus should be on sustainable development not on shutting down business opportunity, especially in the OCS.  There should definitely be additional lease sales in the OCS and we should work together to ensure the successful lease sales and appropriate level of regulation over the safety and environment.   Shell and the other Producers here in the State are good Stewards of the land and resources.  There are also numerous agencies and regulators ensuring that development occurs in an environmentally safe manner.  Standards and environmental safeguards can always be improved upon and our focus should be on these improvements and not on drilling curtailment as some anti-development agencies would like to achieve!   Thank you for your time today!

The Interior Department’s top oil leasing offical is in Alaska.  Acting Assistant Secretary for Land and Minerals Management Tommy Beaudreau heads to Barrow tomorrow to hear what people have to say about Arctic leasing.  He got a preview yesterday in Anchorage.  APRN’s Steve Heimel (NGP Photo) was there:     It was called a "listening session," booked in the Anchorage Assembly chambers for three hours, but Beaudreau, born and raised Alaskan, looked over the room and said he was pretty sure on a beautiful spring day, that the formal comments wouldn’t go that long.  And they didn’t.     At issue was the report on Shell’s botched exploratory drilling season last year, and what the standards ought to be for the future.  Comments ran about as expected.  Conoco Phillips said they wanted more regulatory certainty.  The Sierra Club said Arctic waters are too vulnerable to drill in at all, and the Northwest Arctic Borough complained about being left out of the process, pointing out that migratory animals don’t just stop migrating at the lease sale area’s border.     It was all over in about an hour, and then Beaudreau said it was time for informal comments. The industry executives in attendance didn’t have much prepared for that part.  Shell’s Luke Francis (NGP Photo) wanted to know  the timetable for putting new standards into effect.  Beaudreau said they want them out for comment by the end of the year.  The Wilderness Society said any more lease sales planned for the Arctic ought to be put off.  Beaudreau plans to stick with the current five year plan:     The five year plan doesn’t call for any more sales in Arctic waters until 2016, the last year of the Obama Administration.     Daniel Inulak Lum, a former Barrow tour guide now working for the Northern Alaska Environmental Center, decided to add some informal comments to his formal ones.  He said at least the feds ought to require the industry to prove it can clean up a spill – something Lum does not think possible in Arctic conditions:      Beaudreau said the standards will likely start with those used for Shell.  He said they worked. Shell simply was not allowed to drill down to hydrocarbons without a spill response barge on hand. And that barge was required to have a containment dome to cap any blowout.       The listening session was over well before the time was up.  The comments may have contained no surprises, but the Acting Assistant Secretary said he got something out of it anyway.      He’s likely to get another dose of passion in Barrow, where so far the spring bowhead whaling season has not been good.  In Anchorage, I’m Steve Heimel.  Here are Alaska Dispatch and Anchorage Daily News report of the event.

 The official announcement of yesterday’s Federal "listening session" was curiously unofficial, insensitive to Alaska and had the symbolism of a legal notice nailed to a tenant’s door by the agent of an out-of-state landlord.  

This matter of OCS oil and gas is extremely important to Alaskans because, in part, the future production could help sustain the life of the Trans Alaska Pipeline System (TAPS) and, thus, the entire state economy–not to mention the positive effects on national security, jobs and economic recovery.

The notice was undated.  Broad, advance public notice of a "listening session" was muted if it existed at all.  We are unaware of any such "listening session" having been posted in the Federal Register.  However, we have no reason to believe, based on evidence noted in our earlier commentary, that certain, favored groups were not personally asked to either appear or provide written comment.

To our knowledge, yesterday’s "listening session" in Anchorage and today’s in Barrow have little or no legal basis.  

The notice established two venues for the agency official to appear and ‘listen’.  The most populous city in the state was provided with one noontime opportunity yesterday and Alaska’s important but smaller sister village, Barrow, was scheduled for two sessions today.  Alaska’s second largest city, Fairbanks, our capitol city, and other cities in Western and Southeast Alaska were not scheduled for ‘listening’.

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We devote some attention to this form over substance, dear reader, because the form is substantial.  Here is why.

America’s rule of law that is the envy of many in the world, is based upon certainty, clarity, reasonableness, transparency, objectivity, justice, due process.  

When an agency holds a "public hearing" the public expects there to be reasonable and well publicized public notice.  No one can legally claim later that, "I didn’t know".  In the case of Federal agencies, a Federal Register posting well in advance of the hearing pretty much guarantees that the process has been properly "noticed".

The fairly predictable process then includes such well-established mileposts as the hearing; the sharing of draft documents or findings resulting from the hearing; the additional sharing of final documents for public comment; the application of a new order, rule or policy; opportunity to petition for reconsideration of that new order, rule or policy; the issuance of a response to the petition; the opportunity to seek further relief from the court system, etc.  As a non-lawyer and former member of a regulatory commission, I believe that general (i.e. not exact) description applies to most governmental decision processes requiring public input.  

The problem with having a government official from Washington come to Alaska, announcing he or she is having a "Listening Session" is the ignoring of due process that accompanies an undefined process.

The Assistant Secretary in question here, according to the announcement, is a man named Tommy P. Beaudreau, Acting Assistant Secretary, Land and Minerals Management, U.S. Department of the Interior(DOI), with the Bureau of Safety & Environmental Enforcement (BSEE) and the Bureau of Ocean Energy Management (BOEM).  He noted an Alaska background in his remarks yesterday and if he is related to an old friend of mine, Jim Beaudreau, my respect for him is automatically elevated to the level of my esteem for the office he holds.  No matter how nice a person he is, however, and no matter his background, his involvement in this "listening session" process is confusing.

For the moment, we will ignore Mr. Beaudreau’s long confusing title describing one or several positions within DOI and move on to our observations:

1.  A properly noticed public hearing would vacuum up testimony and assemble it into a record supporting an agency action.  An unhappy party could then petition for reconsideration, appeal and otherwise contest the outcome within a due process framework.  We are not aware of defined rules of a "listening session" — except those stated in the announcement.  

2.  The announcement states the acting secretary, "…will hold three listening sessions June 6 and June 7 with an eye toward improving rules for oil and gas exploration, development and production in the Alaska OCS."  This is very dangerous, amateurish language.  It is amateurish because it states a general and not a specific goal of improving rules.  Therefore, the "listener" could hear a very broad array of comment not at all relevant to the work his agency will eventually do.  It is dangerous, because it is, in actuality, more than a "listening session".  The notice goes on to say that the comments may be maintained by the government together with identifying information, filed under a docket and that additional written comments may be filed via www.regulations.gov.  It may, therefore, be confused with an "official record".  

3.  What if the agency states that a future decision is, in part, based on something offered by a citizen at a "listening session"?  Could an appellant claim that things "heard" at a "listening session" were not part of the official record because the "listening session" had not been properly noticed or characterized as a hearing?

4.  What if an appellant claims some future agency decision is based on what was said in a "listening session", even if it wasn’t?  The product of litigation could be delay or destruction of a project.

5.  If someone claims an agency decision was in part based on information obtained during a non-noticed federal "listening session", he could say that had he known about the "listening session" and participated he could have provided more accurate information upon which the agency could have based its decision.

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The bottom line is that if the federal landlord presiding over most of Alaska’s lands and waters — and, thus, her childrens’ futures — wants to become educated about issues relating to an official action he’s about to take, he better do it transparently.  

Transparent action requires due process.  Due process requires proper notice, notification and implementation of a fair process. 

Since this was not done, Alaskans should not be suprised if, someday in the future, Beaudreau announces that permitting or lease sales cannot be conducted on schedule because someone has challenged the basis for an agency rule or decision arising from some ill-conceived "listening session".

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In conclusion, we are quite concerned for Alaska’s future for two reasons:  

First, if DOI plans to issue brand new Arctic OCS regulations, how many more years of delay can we expect?

Second, though federal officials might be well-intentioned, decision makers need to be more careful about their use of powerful positions to create regulations with the force of law — that are subject to challenge and delay — after having created an informal process which is not due process.