NATURAL RESOURCE DEVELOPMENT
Litigating and Liaising
Alaska’s highly specialized attorneys support natural resource projects every step of the way
By Tasha Anderson
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laska is a big place, and its natural resource development projects match that scale: world-class deposits, budgets in the billions, hundreds and thousands of jobs in the making, and associated lawsuits and legal issues introduced by parties nationwide.

In September, fifteen states sued the US Department of the Interior, Interior Secretary David Bernhardt (in his official capacity), and the Bureau of Land Management over the decision to allow drilling in the Arctic National Wildlife Refuge (ANWR), a decision Bernhardt announced in August. According to the suit, the defendants “unlawfully authorized the Coastal Plain Oil and Gas Leasing Program, opening the unspoiled Coastal Plain of the Arctic National Wildlife Refuge to expansive oil and gas exploration and development based on inadequate environmental review and an unlawful Record of Decision.”

The suit asserts the decision to allow oil and gas exploration activities violated the National Environmental Policy Act, the National Wildlife Refuge System Administration Act, the Alaska National Interest Lands Conservation Act, the Administrative Procedure Act, and the Tax Cuts and Jobs Act of 2017.

In addition to these general, big picture problems, the states laid out their concerns individually.

A portion of Alaska’s exported oil is refined in Washington, which “reasonably expects to receive oil extracted from the Arctic Refuge and to bear the impact of the oil transiting via Washington waterways and tidelands, emitting pollutants into Washington air during the refinery process, being distributed throughout and from the state as fuel, and contributing to the potential worker safety hazards associated with refinery operations.”

California also objected to additional oil production supplying its in-state refineries. “In 2019, California refineries processed more than 73 million barrels of Alaska crude oil, accounting for 11.9 percent of the refineries’ total production. Exposure to pollutants produced by these refineries—which include carbon monoxide, benzene, formaldehyde, and arsenic—can cause cancer, birth defects, and asthma, among other health impacts, especially in environmental justice communities that are disproportionately affected by industrial pollution. Refineries also produce high levels of greenhouse gases, thus further contributing to the climate harms caused by oil and gas extraction.”

Massachusetts, Connecticut, Delaware, Illinois, Maine, Maryland, Michigan, Minnesota, New Jersey, New York, Oregon, Rhode Island, and Vermont all made similar claims that the decision to allow exploration sets at risk the wellbeing of many species of migratory birds and in turn endangers tourism-related activities in those states.

Oil and gas projects in less controversial areas still take significant time to develop, and with the approval for oil and gas exploration not even half a year old, any specific project in ANWR is hundreds of permits, thousands of man hours, millions of dollars, and billions of data points away.

Because of this, the suit by necessity argues that the process of approval was flawed, stating the defendants “unlawfully prioritized oil and gas development over the Refuge’s conservation purposes”; “failed to take a hard look” at the impact of greenhouse gas emissions and the impact on migratory birds; and “failed to consider a reasonable range of program alternatives including an alternative that serves the conservation purposes of the Arctic Refuge.”

In essence, the defendants weren’t careful and made a bad call about what might happen.

So in a familiar story for Alaska, this lawsuit is not about preventing a badly designed project—no one knows what any project would actually entail as none have been proposed or reviewed through any state or federal process—the lawsuit is about preventing any project from happening, no matter what it may be.

This obviously isn’t the only lawsuit challenging resource development in Alaska—it isn’t even the only lawsuit against the federal government concerning exploration in ANWR. In terms of legal contentions against natural resource projects in Alaska, it’s just the tip of the proverbial iceberg.

When Final Permits Aren’t Final
Not every development project in Alaska is challenged in a court of law, but such projects are relatively far and few between. “There are projects that happen on the North Slope that fall within the existing footprint up there that sometimes do not see lawsuits,” says Eric Fjelstad, who leads Perkins Coie’s Alaska environmental and resource practice and is a partner in the firm’s environment, energy and resources practice. “But when you get outside of that existing footprint, if you’re pushing west into NPR-A, if you’re pushing north into the offshore areas, if you’re pushing east into ANWR—that’s holy ground for people… Without getting into specific projects, some of them you can say with virtual 100 percent certainty that there will be litigation when the final permits are issued.”

Fjelstad has decades of experience working on exactly those types of projects in Alaska, joining Perkins Coie’s Anchorage office in 1999 and focusing today on projects connected to energy, mining, timber, and oil and gas.

“There are projects that happen on the North Slope that fall within the existing footprint up there that sometimes do not see lawsuits. But when you get outside of that existing footprint, if you’re pushing west into NPR-A, if you’re pushing north into the offshore areas, if you’re pushing east into ANWR—that’s holy ground for people.”
Eric Fjelstad, Partner, Perkins Coie
“I tend to work on big projects; the ones you read about in the press are the ones I’m involved with, and they tend to be hotly contested,” says Fjelstad. “What happens in Alaska is it’s a real dichotomy: people feel passionately about developing Alaska resources and others feel equally passionate, maybe even stronger, about keeping Alaska in a ‘pristine state.’ Big projects bring those emotions and passions to the surface, and in our system there’s no easy way to resolve that. Should a project happen or not? That question gets resolved often through litigation.”
“With all the long lead times and large up-front costs for these companies to extract that mineral or oil and gas, it takes years of planning before even one drop of oil is produced. More often than not, I am working proactively with my clients, learning about their operations, learning about their strategic exploration and development objects, and getting in on the front-end of these things so that we can assure that they’re complying with all the legal requirements, including regulatory restrictions, and protecting the environment from the get-go.”
Jill McLeod, Partner, Dorsey & Whitney
Fjelstad explains that litigation to halt a project’s development is most often brought against the agency that is issuing a permit or authorization and not the project’s owner/operator. However, the outcome of such suits will obviously affect a project, so developers will generally “intervene” on the side of the agency to protect their investments and interests.

“The role of the intervener is typically to support the government’s positions, its briefs… A fair amount of what one would be doing in my space is providing information and supporting the government, but you also provide legal arguments.”

Fjelstad says he’s rarely seen arguing a case in a courtroom. “It’s specialized expertise; it’s hard to do that at the highest level if you’re doing other things,” he explains. But he is regularly on litigation teams and plays a key role guiding a case’s strategy and management.

The Unique Frontier
Much of Fjelstad’s work is done in collaboration with others; the many intricate details and wide array of legal skills required in natural resource litigation make providing legal services a team sport—one in which Perkins Coie is a major player.

“We have 1,100 lawyers across the firm,” Fjelstad says, noting that his group—environment, energy, and resources—is comprised of about eighty attorneys. “We have a deep bench, so we have the ability to marshal people: sometimes you just need more people to get the work done, but beyond that, sometimes you need specific expertise in sometimes idiosyncratic areas.”

And providing legal services for natural resource development in Alaska often requires incredibly specialized knowledge. As Alaskans know, this place is special—and when it’s not, legislation is often passed until it is. “We have a number of statutes that are really unique to Alaska,” Fjelstad says. “The two that stand out the most are the Alaska Native Claims Settlement Act and the Alaska National Interest Lands Conservation Act. Both are unique to Alaska, and there’s a lot packed into those statutes; they’re highly relevant for many natural resource projects. But even beyond that, there’s statutory language about the National Petroleum Reserve Alaska, and there’s everything that’s out there now with ANWR—there’s a variety of things that are in play in Alaska that you just don’t see in other parts of the country.”

For Fjelstad, this is the biggest draw to practicing in the 49th State. “One of the reasons I’m still really energized after twenty-six years is there’s a lot of passion around projects in Alaska,” he says. “Life’s short, and I’d rather work on things where there’s a lot of passion on both sides than a project where there isn’t, and Alaska has that in spades… We have a disproportionate number of projects that are just highly consequential—what I would call national class if not international class in scale. People care about them, people have very strong views. It just makes it fun.”

Beyond Litigation
But litigation, like developing large projects, is a long process that takes place over time. To fill the gaps, Fjelstad supplements his litigation efforts with a variety of other legal services. “I do a lot of work in the commercial space,” he says. Essentially, this work involves sorting out non-contentious agreements between parties: “Company A is doing something; Company B wants to get involved in the project, and there’s a deal that needs to happen.”

He also provides day-to-day legal counsel, which he says “can be really anything.” He might advise on compliance issues in the environmental stage of a permitting process, weigh in on business disputes, look at contract terms, or even help a client with issues that are somewhat political. “It’s the most demanding [part of his work] in the sense that the world moves pretty quickly and people want answers quickly.”

Litigation is highly visible and routinely reported on, which may lead many to conclude it’s the bulk of services that lawyers provide to companies involved in natural resource projects. “There is this view by the public that attorneys focus on litigation, and there’s this perception that all attorneys spend their day defending clients in court,” says Jill McLeod, a partner in Dorsey & Whitney’s Corporate Group and head of the firm’s Anchorage office. “But in reality, most of my practice involves what I call ‘proactive legal services,’ which is preventative, collaborative, and completely non-adversarial… I would say that I’m a corporate transactional attorney… I predominantly work with clients to essentially identify and help them manage their legal risks before they become issues in an effort to actually prevent lawsuits.”

It turns out lawsuits are expensive, they take a long time, and—critically important—“they are plagued by the unknown,” McLeod says. “There are risks involved in litigation.”

When litigation can’t be avoided, McLeod serves in an advisory position, assisting a litigation team on a strategy regarding permitting or other challenges. She’s an expert in the area, as much of her day-to-day work includes helping clients obtain licenses and permits from appropriate local, state, and federal authorities and providing advice on compliance with legal requirements. She also regularly works with her clients on environmental compliance and resource protection statutes and assists with the environmental assessments and environmental impact statements that government agencies use to support permitting decisions.

That doesn’t mean that McLeod’s workload is free of disputes. “Generally the types of disputes that I manage go beyond permitting disputes or environmental legal challenges,” she says. “The disputes that I would generally be involved in relate to royalties, joint operating agreements between partners, lease disputes, disputes that arise between operators and construction contractors… that’s where my role in dispute management and dispute resolution comes in.”

“We have a number of statutes that are really unique to Alaska. The two that stand out the most are the Alaska Native Claims Settlement Act and the Alaska National Interest Lands Conservation Act. Both are unique to Alaska, and there’s a lot packed into those statutes; they’re highly relevant for many natural resource projects. But even beyond that, there’s statutory language about the National Petroleum Reserve Alaska, and there’s everything that’s out there now with ANWR—there’s a variety of things that are in play in Alaska that you just don’t see in other parts of the country.”
Eric Fjelstad, Partner, Perkins Coie
When McLeod’s clients need assistance beyond her specialties, or their disputes do move into a court setting, she relies on the extensive resources of her firm, Dorsey & Whitney, which has been providing legal services for more than 100 years and has attorneys in the United States, Canada, Europe, and the Asia-Pacific region serving clients around the world.

“Because we have a multi-disciplinary team of attorneys across the globe, there’s a platform there that I have access to, so I can help to guide the client through different issues and evolving areas of the law and regulations our lawyers in other offices are tracking sometimes even more closely than I am because it’s a federal regulatory requirement that they’re dealing with daily. So we provide what I would say is a complete legal solution to our clients in the mining and the oil and gas industries.”

Knowing the Business
McLeod’s entrance into the Alaska law scene was not with Dorsey & Whitney but as in-house counsel for ConocoPhillips, where she was able to gain insight into a spectrum of legal issues related to oil and gas projects. “While working as in-house counsel for an oil company, you have a single client and therefore you’re exposed to all the facets of the business operations, and as a result you have the opportunity to handle just a myriad of legal issues for the company,” she says. “Leasing, permitting, drilling, exploration, development and production issues—you name it, I touched it.”

She worked for ConocoPhillips for nine years before transitioning to partner at Dorsey & Whitney, and since then has expanded her industry expertise from oil and gas to include mining.

“There’s a lot of overlap in the legal issues that these two industries face, so it’s been a nice segue for me to move into the mining law realm, as well. I enjoy it.”

It’s also a boon for the firm and its clients. “Dorsey & Whitney has a very large mining practice in the Lower 48; we have offices in Salt Lake City and Denver where we have a number of lawyers who specialize in mining law. When I joined the Dorsey & Whitney Anchorage office, although we had mining expertise in our other offices, there was no one in the Anchorage office who had a mining background. It was an easy transition into the mining law world to assist our existing clients (and new clients) from Anchorage with their legal issues in Alaska.”

McLeod likes to invest in her clients, which she has ample time to do because of the nature of natural resource development. “With all the long lead times and large up-front costs for these companies to extract that mineral or oil and gas, it takes years of planning before even one drop of oil is produced,” she says. “More often than not, I am working proactively with my clients, learning about their operations, learning about their strategic exploration and development objects, and getting in on the front-end of these things so that we can assure that they’re complying with all the legal requirements, including regulatory restrictions, and protecting the environment from the get-go.

“That’s what’s so much fun about working in oil and gas: even as outside counsel, I’ve been able to play that in-house counsel type of role—while working with a company’s in-house counsel or their business and commercial folks—so it’s really great.”