Bill would settle lawsuit in oil company's favor

Posted: Tuesday, May 20, 2003

JUNEAU (AP) The Senate on Monday approved a bill that would settle a lawsuit over Cook Inlet oil drilling in favor of Forest Oil Corp. and make it harder for people to sue over such issues in the future.

House Bill 86 says any Cook Inlet oil and gas project that has received final approval from state agencies is considered authorized by the Legislature.

That provision is intended to render moot a lawsuit Cook Inlet Keeper filed last year against Forest Oil's Redoubt Shoal oil production project.

The Homer-based environmental organization's lawsuit argues the state did not properly consider the project's potential to harm Cook Inlet habitat, fisheries and subsistence resources.

The bill also would prevent most people from suing in the future over Alaska Coastal Management Program decisions.

The Senate Judiciary Committee late last week tacked those provisions onto House Bill 86, a slightly related bill that had already passed the House.

A lawyer for Cook Inlet Keeper said the public did not have enough time to weigh in on the issue.

''The amendment was brought out six days before the end of the session, with no advance notice to the public of the nature or substance of the amendment,'' attorney Rebecca Bernard wrote in a letter to the Judiciary Committee.

Senate President Gene Therriault, whose office worked on the amendment, said the change was made late in the session because it was becoming clear the courts might not rule before the session adjourned, leaving the Legislature unable to weigh in.

Cook Inlet Keeper filed the lawsuit in 2002. The Superior Court decided in favor of the state, but Cook Inlet Keeper appealed that decision to the Alaska Supreme Court, which has not yet ruled in the case.

The Legislature intervened last year in a similar case involving Forest Oil's exploration phase of the same project. That action also came very late in the legislative session as an addition to a bill that had already passed the House.

Forest Oil says an injunction in that previous lawsuit resulted in a 52-day delay, layoffs of 100 people and a cost to the company of $1.2 million.

Therriault and others supporting the bill say the Legislature needs to act to protect jobs in Cook Inlet and revenues to the state from the project.

In addition to stopping litigation over the Forest Oil project, House Bill 86 would limit future lawsuits over coastal management program decisions. The only parties that could sue would be the person or company applying for a permit or a local coastal resource district.

Others could sue only if their claims are based on violations of the state or federal constitutions.

Bernard argues that provision will gut the public's ability to protect its interests in coastal resources.

''The whole wide spectrum of the public is now shut out,'' Bernard said.

Supporters of the bill point to a long history of litigation involving state Coastal Management Program decisions in Cook Inlet, dating back to a challenge of a 1993 oil lease sale.

''It sort of points out that our permitting system is subject to this ongoing litigation,'' Therriault said.

Newton ''Trey'' Wilson, an attorney for Forest Oil, said the corporation's board of directors is weighing the risks of litigation in deciding whether to invest in more Alaska projects.

''Our experience has been that even though our projects have received the approval of the state ... there remains great uncertainty with regard to our ability to continue operations as planned without interruption,'' Wilson wrote in a letter to the Judiciary Committee.

The bill was approved on a 12-8 vote, with Senators Bettye Davis, Johnny Ellis, Kim Elton, Hollis French, Lyman Hoffman, Georgianna Lincoln and Gary Stevens voting against it.

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