In a recent decision hitting Hilcorp with a $265,500 fine for violating an approved drilling plan, the Alaska Oil and Gas Conservation Commission (AOGCC) cited the company’s “track record of regulatory noncompliance.” It sounds a lot like the AOGCC fine Hilcorp received in 2020, which also cited “a history of regulatory noncompliance,” as well as Hilcorp’s “lack of good faith” and the “need to deter similar behavior.” Or a 2015 letter in which AOGCC wrote that disregard for regulations was “endemic to Hilcorp’s approach to its Alaska operations,” and that “Hilcorp’s conduct is inexcusable.”
It’s clear by this point that Hilcorp isn’t merely a business that cuts corners. Corner-cutting is its business model. While some Alaskan regulators write stern letters, others turn a blind eye. In December 2020, the Regulatory Commission of Alaska voted 4-1 to let Hilcorp purchase BP’s Alaskan assets, including its share of the state’s largest and most complex piece of oil and gas infrastructure, the 46-year-old Trans-Alaska pipeline.
According to an analysis by the Alaska Petroleum Joint Crafts labor group, Hilcorp spent 20% less on maintenance than other Alaskan oil and gas operators in 2018. “In our experience, deferred maintenance (or inadequate levels of maintenance spending) can put both frontline workers and the general public at risk,” the group wrote. In spite of Hilcorp’s known practice of squeezing profits from aging infrastructure by neglecting upkeep, the RCA decided to take Hilcorp on its word that the privately owned company has the resources to operate the pipeline safely and to respond to disaster. They approved the purchase while excusing Hilcorp from disclosing financial records that could have demonstrated its fitness — or lack thereof — to responsibly manage the pipeline.
Now the city of Valdez, which would be on the frontline of any potential TAPS disaster, is taking the RCA to court over this poor decision. On June 27 the Alaska Supreme Court will hear oral arguments in a case that could force the RCA to reconsider its approval.
If you’re going to be in Anchorage around this time, you’ll have a chance to help the Alaska Public Interest Research Group (AKPIRG) raise awareness of the harm the state is doing by allowing Hilcorp to keep its secrets. AKPIRG is planning a public rally at the courthouse at noon on the 27th, ahead of the hearing at 1:30pm. You can help prepare with a screen printing and banner making event on June 26 at the AKPIRG office at 2522 Arctic Boulevard in Anchorage.
If you can’t make it to the hearing in Anchorage, you can livestream the City of Valdez v. Regulatory Commission of Alaska, et al. hearing. For more information on the case and its consequences, you can watch this info session with AKPIRG’s energy experts Alyssa Sappenfield and Phil Wight.