Wielechowski: Confidentiality in AGIA v confidentiality in the AK LNG line

In a comment, Alaska state Sen. Bill Wielechowski responds to questions about the differences between the confidentiality measures in AGIA, which he voted for, and the legislation passed last session that allows negotiations to advance an LNG line, which also include confidentiality agreements, which he didn’t vote for.

There are times when confidentiality provisions are necessary. In AGIA we had a confidentiality provision, but it was much more limited as the burden was on the organization seeking to keep something confidential to prove it was proprietary or a trade secret.

In SB 138, the legislature, wrongly in my opinion, allowed the Commissioner to “enter into confidentiality agreements to maintain the confidentiality of information related to contract negotiations and contract implementation associated with a North Slope natural gas project.” As a lawyer, you should know that “information related to contract negotiation and contract implementation” is way too broad, and potentially allows ANY discussions related to the gasline contract to be confidential and hidden from the Alaska public. This is unnecessarily withholding information from the public and bad public policy, in my opinion.

That said, some vital pieces of information have been kept confidential, like the results of the supposed failed 2010 open season, and what, exactly, the company spent $300 million of state dollars on while working under the AGIA license.


19 thoughts on “Wielechowski: Confidentiality in AGIA v confidentiality in the AK LNG line

  1. Jon k

    Lynn – what you keep missing is that most of the information will be disclosed to the public. The question of confidentiality is a question of timing. The public will participate in hearings and can learn all they need to know. What the public will need to know to evaluate the merits of the project or contracts will be disclosed.

    Do you have a problem with the MOA owning the Beluga field? Should you be able to participate in commercial negotiations or see proprietary information related to the field’s geology? Anyone familiar with this transaction understands that it has been a huge benefit to Anchorage – but it would never have happened if all information could not be kept confidential.

    In any event, I can’t see what this bothers you so much given that you have convinced yourself that the project will die.

  2. Crude is Rude - Gas is gold

    IMHO; … all this BS about concealment of the facts and confidence-games is an effort to blow a huge speculative financial bubble into nearly worthless methane..
    ..methane worldwide is as abundant as potable water.

    Over a billion has been wasted on this stupid-silly game so far,
    by 10,000 shameless Alaskan Idiots.

    I’m happily living off-grid, and make my own energy.
    Alaska has not learned the lessons of the ENRON Fiasco.

    Click on my nickname here for an interesting link about Speculative Frenzy…

    At the peak of tulip mania, in March 1637, some single tulip bulbs sold for more than 10 times the annual income of a skilled craftsman. It is generally considered the first recorded speculative bubble (or economic bubble), although some researchers have noted that the Kipper- und Wipperzeit episode in 1619–22, a Europe-wide chain of debasement of the metal content of coins to fund warfare, featured mania-like similarities to a bubble. The term “tulip mania” is now often used metaphorically to refer to any large economic bubble (when asset prices deviate from intrinsic values).

  3. Marvin

    My laptop is a MacBook Air on the new operating system. The iPad is also on the newest operating system. 7

  4. Lynn Willis

    I can understand the necessity of having confidentiality in business dealings and certainly in some actions involving the state with personal actions, bids, and similar matters. I would contend that a labor negotiation or other action involving the state is not the same as this effort to participate as an equity partner in a commercial enterprise. The State of Alaska is not simply loaning money, granting a license or permit, executing a labor contract, purchasing goods or services, or performing other activities normally associated with government operations. This is different.
    This effort will result in Alaska being a legally recognized business partner with four other private concerns. As Steve Butts from Exxon stated on a radio interview broadcast on KFQD this summer, this arrangement between private enterprise and an individual state of the United States has never been attempted before. I want maximum access to this process by those who might offer guidance and insight that would best protect the interests of current and future Alaskans.
    Senator Wielechowski provided the broad scope of the language in SB 138 that can be used to shield most everything and I don’t like that latitude being granted. I would suggest the legislature “return to the drawing board” and more clearly define the scope of confidentiality that will be allowed and the method to oversee that privilege by the courts or other agency. If you want to invest your money go ahead; however, if you want to invest mine, or my children’s, I want to know what you are up to …

  5. Amanda Post author

    @Lynn. I would be interested your answer as to why if nothing should be kept confidential regarding this project, other types of negotiations, say state labor negotiations, are kept confidential.

  6. Lynn Willis

    I don’t understand your first question. How could the public possibly know what information might inhibit the legislative effort if that information was withheld from the public in the first place?
    Doesn’t the legislature represent the public and have a fiduciary responsibility to that same public regarding the expenditure of public funds? Therefore, the public has every right to participate in the process since it is the public’s money that is going to placed at risk. If the legislators want to pool their individual personal wealth in an investment scheme then they have a right to keep that effort to themselves; otherwise, they should have no such privilege of broad confidentiality as defined in SB 138. The issue of claiming a privilege to participate in a commercial project perhaps clearly demonstrates that this type of business partnership is not the role of a sovereign state of the United States.
    Lastly, regarding my choices; option one is the only option we have, or have ever had, in reality.

  7. Simi

    This Senator is little more thab a liberal impediment to development. He has no rational understanding of business or the economy. He criticizes and points out conflicts that some of his Republican colleagues have on oil matters. Yet, he fails to point out his very apparent conflicts getting paid by the IBEW and sponsoring labor related legislation. By his own standards, he is very unethical. I’m sorry Amanda, featuring a comment of his can only be intended as a provacative measure as it certainly doesn’t represent a balanced or legitimate point of view.

  8. Jon K


    What specific information will be kept from the public that will inhibit the legislature’s ability to approve contracts?

    Why do you think the public has a right to participate in negotiations? More importantly, can you name one commercial project that could move forward without confidentiality?

    On gas Commercialization the state has three options: do nothing and wait on the market; subsidize the highest risk capital to help move companies through the permitting process (AGIA); or take an equity stake in the project (AK LNG). Which option do tho prefer?

  9. SAnchorage Carpool Driver

    This morning, I had similar views on my phone (Android) but not on a laptop. Try refresh & the new, larger, right number of comments does appear.

  10. Lynn Willis

    Senator Wielechowski makes a very valid point. I suppose if I dare broach the topic of AKLNG at any constituent meeting I will be met with stony silence from the fearful and self righteous indignation from those who can legally refuse to talk about it as the were able to : “enter into confidentiality agreements to maintain the confidentiality of information related to contract negotiations and contract implementation associated with a North Slope natural gas project.”
    I don’t remember Sean Parnell telling Ethan Berkowitz during the 2010 debates that while he (Parnell) would have liked to announce the results of the AGIA open season, he could not reveal the results because of confidentiality agreements. Governor Parnell simply refused to answer the question. Now we know the results which was that there were no offers either tendered or accepted that supported our expenditure of hundreds of millions of dollar at that time. Yet for several years after that election we continued to pay for AGIA until it finally collapsed.
    Even after AGIA collapsed, the Administration claimed that Trans Canada had significant proprietary information that either the state had to purchase outright or could avoid purchasing if we took Trans Canada as a business partner for AKLNG, which is what we did. The Alaska State Government, who entered into the AGIA contract, did such a poor job that we risked having to pay Trans Canada “treble damages” for ending he contract because the state failed to clearly define the conditions that would cause the contract to be no longer viable. The threat of these “treble damages” might well have also induced us to take Trans Canada as a partner in AKLNG.
    Now the same organizational process that created AGIA will create/approve the final AKLNG contracts (if we get that far) with much more fiscal liability if the highly probable cost overruns do occur.
    The difference between the projects is significant because we did not invest in AGIA as equity partners as we are about to do in AKLNG. I am concerned that our liability under AKLNG could be much greater this time around. In any event, the cost to Alaska for AGIA was upwards of 300 million dollars and not an inch of pipe was laid nor a molecule of gas transported; yet, our legislature is eager to once more enter this arena with even more exposure to risk – and it only gets better when done behind closed doors, or does it?

  11. Crude is Rude - Gas is gold

    Yes, I’m very interested in seeing what has been concealed under confidentiality and non-disclosure rules by the legislature for all the years going back to 1960.

    When we built TAPS I was deeply frustrated by the secrecy behind closed doors..
    ..and I’ve been campaigning for open government & open business ever since.

    Alaska has squandered billions without proper oversight..

    Alaska needs more adult-supervision, too many 70yr old juvenile crooks running around,
    they need adult day-care.

    We all gotta grow up someday, and I’m happy Bill Wielechowski has learned to muster the courage to resist the buffalo herd of corruption in Alaska.

    TAPS was stupid…
    I thought AGIA was stupid,
    and today I think how the AK-LNG Project is managed is reckless,
    bloated with pork, and corrupt as hell.

    If you didn’t let the flypaper fall into the soup,
    then you wouldn’t be making me wear a blindfold when serving it to me.

    If you want to move 4bcfd of gas to every corner of Alaska,
    build a world-class gas-industry in Alaska,
    and export the gas-products & the surplus raw alkanes,
    then step aside,
    I’ll show you how to do it for 10% of what all you green-eyed monsters are trying to BS all of us into thinking it will cost $65billion….
    ….I’m not buying it, and I’m not gullible.

    If you want a sensible megaproject, help me go clean up Fukushima.

    What’s all that black stuff on your lips ??
    …looks like crude oil.

  12. LS

    hi Amanda, why do the number of “replies” not match with the actual number of replies under a post? Are you having to block that many “replies”? Curious, Thx!

  13. Jon K

    The issue that the Senator ignores is that most of the information related to this project will not be kept from the public. Moreover, the legislature will review virtually all aspects of this project in a public process. Bottom line, it is a question of timing as to when the public gets to see the information.

    Is the expectation that all negotiations should be subject to public comment and participation? If so Senator, why aren’t labor negotiations subject to a public process? Indeed, the process here is very similar to the process established for labor contracts.

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