AJOC EDITORIAL: Don Obama shakes down ConocoPhillips

Nice little oil project you’ve got there, Conoco. Be a shame if anything were to happen to it.

The $8 million exacted from ConocoPhillips in order to receive its permit to construct the Greater Moose’s Tooth-1 project in the National Petroleum Reserve-Alaska is a rather elegant combination of old school protection rackets and third world government kickbacks.

In the Record of Decision issued Feb. 13 authorizing the GMT-1 project, the compensatory mitigation section states that the permittee “must contribute” $1 million to the Bureau of Land Management within 60 days to develop a Regional Mitigation Strategy for the northeastern NPR-A. After that, C-P must pay $3.5 million after laying the first gravel and another $3.5 million after completion of the road, pad and pipeline.

Even if ConocoPhillips decides not to move forward with GMT-1, it still has to fork over $1 million to BLM by April 13 in exchange for its preferred road route being selected.

George Orwell would have appreciated the doublespeak of calling a mandatory payment a “contribution,” but perhaps not as much as Mario Puzo would appreciate ConocoPhillips being forced into a decision to either “contribute” the $8 million to BLM or see its permit application rejected and tens of millions if not more in engineering work go down the memory hole.

Talk about an offer you can’t refuse.

Interior Secretary Sally Jewell doesn’t see what the big deal is. After all, ConocoPhillips is a major oil producer and has plenty of money lying around to grease government palms. It’s a striking revelation of an authoritarian mentality that believes the private assets of a company engaged in lawful activities are subject to the appropriating whims of the federal government that controls the permits.

To be clear, this $8 million “contribution” goes above and beyond what ConocoPhillips is already obligated to spend for mitigation measures directly related to its activities and in fact goes further into potentially being used to clean up the federal government’s mess of legacy wells in the NPR-A.

The ROD acknowledges this fact, stating that the mitigation measures may include “cleanup of previously disturbed sites that pre-date the production phase of NPR-A” such as “legacy well reserve pits.” Put another way, Jewell would make ConocoPhillips pay for damage it hasn’t done in order to clean up damage the federal government already has.

The ultimate irony of this petty graft is that ConocoPhillips has paid billions upon billions in royalties and taxes over the years that have benefited Alaska Natives far more than anything Sally Jewell can come up with, and it willingly gives millions more in actual contributions to successes such as the Alaska Native Science and Engineering Program.

If we hadn’t already lived through six years of an administration whose hypocrisy is only outdone by its disregard for the rule of law, this “pay-to-play” scheme could be considered a new low.

Unfortunately, it’s only the new normal.

02/18/2015 - 12:54pm