Alaska Conservation Voters Pressroom

State officials trying to bring a gas pipeline to Alaska say they are convinced they can protect it from most economic challenges.

Experts inside and outside the Legislature are more concerned about protecting Gov. Sarah Palin's Alaska Gasline Inducement Act from legal challenges.

U.S. Sen. Ted Stevens, on a recent visit to Juneau, warned the Legislature about the risk of losing time and markets because of the delay, and he said court challenges presented the biggest potential risks.

"The threat of litigation is very real," Stevens warned.

In testimony before the Legislature, gas producers said they, too, anticipated legal challenges.

Exxon Mobil Corp. Alaska executive Martin Massey said his company wanted AGIA to include specific criteria on how the winning project would be selected.

That "is likely to lead to litigation for participants not selected for inducements," he said.

Commissioner of Revenue Pat Galvin told the Legislature that leaving out specifics would help limit legal risk.

"We did that consciously," he said. The risk of having the project stop on a court case is much lower if the state has discretion over who gets the award, he said.

Massey said Exxon Mobil would prefer that AGIA include a provision for binding arbitration, in which an arbitrator would have the authority to impose a decision upon the parties in the event of a dispute between the state and the pipeline builder.

In detailed discussions of the bill during the last week, legislators explored possible ways of "bulletproofing" AGIA, the legislative buzzword for legal protection.

The AGIA next moves into the Senate Judiciary committee, where possible legal threats are a likely topic.

Among the amendments to be considered, say several legislators, are ways to add legal body armor.

One of those methods might be to require anyone submitting an application for the exclusive pipeline license to waive their right to sue if they lose out.

Stevens was one of those advocating the bulletproofing in meetings with the Legislature last month.

"It is my hope you will require any entity seeking to participate in this process to agree not to join or support litigation challenging or seeking to delay the final decision of the state," he said.

Rep. Mike Doogan, D-Anchorage, supported AGIA in the House Oil and Gas committee last week. He said he wanted to prevent lawsuits, but questioned whether the state could really stop someone from suing.

"Can we really extinguish somebody's legal remedy? I don't know,"

Sen. Fred Dyson, R-Eagle River, was one of those who took Stevens' warning to heart.

He said he'd like to find a way to make sure that even if there is a lawsuit, work on the gas pipeline can go forward "so the people's gas gets shipped while the court case goes on."

Attorney General Talis Colberg said when AGIA was announced, there was little risk of a full-fledged civil suit. It was recognized, however, that an injunction filing could result in costly delays.

Stevens has also warned of another legal fear, so far little discussed at the Capitol: the risk that environmental groups may oppose a gas pipeline.

"Dedicated enemies of any development in our state may seek to delay this project," he said.

However, Kate Troll of Alaska Conservation Voters said she hasn't heard of any opposition and doesn't expect it from Alaskans. A number of groups she represents got together to discuss the gas line last year and didn't see any problems with it.

"We cranked out a position paper in support," she said.