Saturday, September 23, 2006



It's time to put it to rest, once and for all.

Doogan supports Knowles.

Doogan and Knowles are BIG MONEY candidates.

Doogan in 1994, criticized Knowles for taking BIG OIL money. And now it seems according to reports by Kyle Hopkins, BIG OIL money is starting to flow again into the Knowles campaign.

From Kyle Hopkins.....

A Knowles fundraiser Thursday night at the home of former Democratic Gov. Bill Sheffield netted $40,000, said Curtis Thayer, who was listed as a host.

For Thayer, a longtime Republican insider and campaign strategist, the decision to raise money for Knowles took some soul-searching. He said he doesn't agree with Knowles on many social issues and it was only two years ago that Thayer helped raise $6 million for Lisa Murkowski as she beat Knowles in a U.S. Senate race.

In this year's primary election, Thayer volunteered to handle fundraising for Republican candidate John Binkley, who raised the most money of any candidate but lost to Palin. Thayer said Knowles called him two days after that election.

Now Thayer, an executive with Enstar Natural Gas Co., says getting a gas pipeline built in Alaska is his top priority and he and other business people look to Knowles -- who was governor from 1994 to 2002 -- as the best chance to make that happen quickly.

Doogan on his website has criticized Murkowski of many things, unfortunately for Doogan, Murkowski isn't running, but Knowles the guy he supports is.

And that is where the "truth in advertising" takes a turn.

Northstar .........

Jody Brion, attorney for Ray Metcalfe (Republican turned Republican Moderate turned Democrat) and Clyde Baxley (Democrat) filed a lawsuit against B.P.

Baxley v. Alaska Dep't. of Natural Resources (5/15/98), 958 P 2d 422

The case ultimately lost in the Alaska Supreme Court.

But here are the fun parts .....

The facts as stated by the Alaska Supreme Court.

The State and BP Exploration (Alaska), Inc. argue that NPS terms allow the lessor to reap the benefits of rising oil prices in the future, especially if the lessee finds cost-effectiveways of developing the field and extracting the oil. According to the State and BP (collectively, the State), leases with high NPS terms are the most risky for the lessor, because the lessor will receive little or nothing if the field is unprofitable, or if the lessee develops the field in an inefficient manner. See, e.g.,Kuntz sec. 63.5, at 258 ("[T]he owner of the [net profit] interest is dependent upon the activity of the lessee to generate net profits.").

Keep in mind the "State" being Tony Knowles ....... Sounds like Tony is arguing for fiscal certainty and net profits doesn't it?

On to some Lawyering in the Anchorage Press.......

The second major issue is that not only was the Northstar deal illegal, but it is unbelievably bad for Alaska, and hundreds of millions of dollars in oil revenue that should go into the Permanent Fund, build schools and fix potholes, will now line the pockets of British Petroleum shareholders. The math is simple and indisputable. British Petroleum's rate of return under the new, illegal deal jumped from 10 percent (old lease) to 21 percent (new lease). That means the company will make more than twice the return on every barrel of oil it pumps. The Northstar field is estimated to contain at least 135 million barrels of oil (but probably much more), worth approximately $18 per barrel. That means there is at least $2.43 billion dollars in oil wealth below the frozen tundra up there. If BP is going to make 11 percent more profit than before, then the moment Tony's boys shook hands with BP behind closed doors, $267.3 million in your money changed hands to BP. And what did you and your fellow Alaskans get in return? Jack squat.

Yet the damage is even greater because the undisputed facts are that if Northstar had been rebid after BP defaulted, it would have brought approximately $98 million in additional revenue to the state. That's money that is not going into the Permanent Fund because Tony Knowles' minions gave it away.

Why did the Knowles administration simply give hundreds of millions of dollars of your money away to his friends and political contributors at British Petroleum? I don't know. Why don't you ask him? But when he tells you "because we want early development," don't buy it. All the DNR had to do to get early development was to demand it in the first place! They didn't bother. Rather they decided to buy it, for hundreds of millions of dollars. It's a deal that stinks to high heaven, it's sordid politics, it's what was not supposed to happen in Alaska.

And what if Northstar is only the beginning? Knowles is now requesting that the Legislature allow secrecy on the gas line negotiations. This is unbelievably bad and essentially preapproval for bestowing billions of dollars to those at the table, Tony's friends and favorites. Northstar, my client Ray Metcalfe believes, is the test case. If BP prevails, expect more of the same, on an unprecedented scale.

Sound familiar? It sounds like the Democrats of today in regard to their criticism of Murkowski.

It is time for Doogan and Knowles to put up or shut up. Knowles and Doogan need to start putting their money where their mouth isn't and that is in "truth in advertising".


Anonymous said...

Unfortunately you forgot to mention that Northstar ended up being a good deal for the state:

After thorough scrutiny, the Legislature approved the change, and it was further upheld by the state Supreme Court after litigation. Northstar is producing 60,000 barrels per day today and is bringing the state more money under the negotiated fiscal terms than it would have under the previous terms.
[Alaska Journal of Commerce, September 24, 2006]

Tom said...

No argument with that.

Unfortunately production is down to 47,000 barrels a day.

The point of the post was the hypocrisy of Knowles and doogan.