ALASKAN CRUDE CORP. v. State
261 P.3d 412
Alaska2011Background
- Arctic Fortitude Unit formed in 2006; Alaskan Crude operates the unit and White is a leaseholder and president.
- Unit agreement sets Stage 2 work obligations, with October 1, 2007 deadline and automatic termination if not cured.
- Alaskan Crude sought modification to extend deadlines citing winter tundra travel constraints; Division denied; amended plan later enacted.
- Alaskan Crude claimed force majeure due to AOGCC gas-only determination and its appeal, arguing it delayed obligations.
- Division and Commissioner denied force majeure; found no default cure basis for delaying deadlines beyond those proposed in amended plan.
- Superior court affirmed the Commissioner; Alaska Supreme Court reviews de novo and defers to agency interpretation of regulations.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Is the pending AOGCC decision a force majeure event? | Alaskan Crude contends the AOGCC decision and related appeal prevented performance. | DNR held such litigation was foreseeable and within control, not force majeure. | No force majeure; not beyond reasonable control or unforeseeable. |
| Does the Commissioner’s proposed default cure constitute an improper unilateral amendment? | Default cure amounts to unilateral modification of the unit agreement. | Cure follows the unit agreement procedures and is not a unilateral amendment. | Not a unilateral amendment; cure complied with agreement terms. |
| What standard governs interpretation of the force majeure clause here? | Regulatory force majeure should be interpreted in favor of the lessee's delay. | Agency regulation defining force majeure governs and is to be given deference. | Defer to agency interpretation; reasonable basis standard applies. |
Key Cases Cited
- Exxon Corp. v. State, Dept. of Natural Res., 40 P.3d 786 (Alaska 2001) (agency decisions and administrative review in unit contexts)
- Gottstein v. State, Dep't of Natural Res., 223 P.3d 609 (Alaska 2010) (third-party challenge to DNR approval of development plans)
- White v. State, Dep't of Natural Res., 984 P.2d 1122 (Alaska 1999) (appeal timing and agency action in oil/gas unit context)
- Beal v. McGuire, 216 P.3d 1154 (Alaska 2009) (standards for administrative review and contract interpretation)
- Goldstein v. State, Dep't of Natural Res., 673 N.W.2d 892 (Wis. App. 2002) (force majeure and unforeseeability considerations in leases)