Les Gara gets a polite ass kicking from Exxon

June 17, 2008: Excuse my language, but there is simply no other way to put what happened at approximately 4pm on Tuesday afternoon in the third floor conference room of the Howard Johnson Hotel.

For two days, Craig Haymes, Alaska Production Manager for Exxon Mobil sat quietly in the audience and listened as Anchorage Democrat Les Gara attacked both his industry and his own company during the legislative hearings on AGIA.

On Monday, Gara stood up before the Federal Energy Regulatory  Agency and accused the producers of wanting to build the gas pipeline so they could kill competition and prevent independents from shipping gas. 

On Tuesday, Gara stood up before the DNR and the AOGCC and in his most visceral tone yet accused Exxon of stealing from the state for the last thirty years by failing to develop Point Thomson and assaulting their corporate credibility.

Haymes sat quietly in his front row chair just a few feet away from Gara's temper tantrum and never blinked.

At three O'Clock, Haymes stepped up onto the stage all by himself and sat at the head table to give his presentation. One man, surrounded by five empty chairs.

Just minutes into his presentation, Gara signaled to the Committee Chair that he had a question. When Haymes completed his presentation on Point Thomson, Gara approached the microphone to ask his question.

"You have the unenviable position of representing your company today and I know what you say you've been hired to say", Gara said in what has become his tradition of making a self serving speech before asking a question. "If my words seem harsh they are directed at your company", Gara added. 

"I'd like the lease back", Gara continued, referring to the ongoing litigation at Point Thomson over the unit agreement and leases.  "Your company has conceded to 16 different work violations since 1983" Gara asked rhetorically. 

He continued without giving Haymes a chance to respond.

"You have asked the state to pay you back $800 million dollars for work that you've done on Point Thomson." "Isn't it true that you spent $700 million of that before 1983", Gara asked.

"Am I wrong about the work violations and the $700 million" Gara finally asked the lone Exxon executive.

Haymes, slowly leaned into his table top microphone and sounding as cool as an October evening, politely began. "Representative Gara" and the rest was an absolute blur, a virtual three minute lyrical whipping. 

What proceeded was Haymes offering a thirty year chapter and verse explanation how Gara didn't quite understand what those terms meant and how Exxon had satisfied all of their previous plan requirements, and the fact that those work violations were on optional tasks and not under contract.

Haymes continued to politely undressed Gara in front of a packed room. Yes, that is true we did spend $700 million before 1983, but if you put that in 2008 dollars along with what we invested since then in Point Thomson, it would cost a company around $5 billion to duplicate today, Haymes replied.

Gara got so overwhelmed by the answer and unable to offer a response he bailed out. "I don't think its useful for us to go back and forth on respective positions, I suspect the Attorney General has a different view", Gara said as he seemed to be desperately sinking in his own hypocrisy. 

But this is typical Gara, throw a bomb but when someone throws it back harder he can't handle it. Go figure this; the guy challenges Exxon on their respective position and then says it's not useful to go back and forth on respective positions.

Then Gara came back for more punishment.

He questioned Haymes on Exxon's proposed plan of development and challenged him on the data supplied by Petro Tel that was already discredited by Haymes earlier in his presentation.

Haymes walked Gara through Exxon's plan and outlined just how quickly under their proposal they will be able to evaluate what resources are there and ramp up accordingly.

Then Gara stepped into the biggest hole yet. 

"I guess I was a little disappointed in your presentation I think", said Gara again prefacing his question. "You wanted to let us know that we couldn't go ahead with the gas pipeline without a lot of gas and that half the gas we need will come from Point Thompson. But you based that amount on the amount of gas that AOGCC has said they'd let off today, not fifteen years from now when there would be a pipeline going. I think you overstated our inability to go ahead on a gas pipeline without Point Thompson", Gara ended.

Haymes again without blinking, and in a voice even calmer than before, corrected Gara.

"I didn't base it on production rates, I based it on known resources. What I put out there is for 3.5bcf a day pipeline for 25 years, you need 45 to 50tcf. That's how much gas you need for that commitment. And that's in appendix J of the 2000 page decision document. Prudhoe Bay is only 25tcf. That means you need another Prudhoe Bay if Point Thomson is off the table. And I never mentioned take off rates, that's a whole other discussion."

By this time Gara looked noticeably uncomfortable standing in his own shoes. He quietly apologized to Exxon's Haymes and quickly slid back into his chair as the rest of the room mumured.  

So here was Les Gara; Superman versus that evil Exxon empire. His one shot to prove to the world that his constant blustering and complaining actually had merit. 

But instead of coming off looking like superman in a red cape, Gara sulked away looking like Lois Lane in tattered pajamas.

Meanwhile, Craig Haymes from Exxon still hadn't blinked.