Larry Persily is pessimistic about the pipeline. See the part in bold...
Persily details historic, strange political times in Alaska
alaskadispatch.com
September 15, 2008
Larry Persily, a former Alaska journalist who worked for Gov. Sarah Palin at the state office in Washington, D.C., until earlier this year, delivered to the Anchorage Chamber of Commerce Monday a down-to-earth, tell-it-how-it-is speech describing the historic, if not strange, political times Alaskans are now living under the national spotlight.
Persily, one of Alaska’s great political observers who took Palin to task after her vice-presidential speech at the Republican Convention earlier this month, described to the state’s business community Monday the tangled relationship between Palin and Alaska’s congressional delegation over the Ketchikan “Bridge to Nowhere,” hinting at the politics of luck and opportunity that gave birth to the first female Republican vice-presidential candidate, as well as offering a detailed analysis of the state’s unrelenting quest to deliver Alaskans the elusive natural-gas pipeline.
Here’s Persily’s full speech to the Anchorage Chamber of Commerce, Sept. 15, 2008:
When I accepted the invitation two months ago to talk about Alaska and national politics, I never imagined it would be this big of a deal. I’m sharing in all the excitement of running for vice president without having to raise money, answer questions about my personal life or study the issues.
But like it or not, it’s not only our governor who is under national scrutiny. So is Alaska — our politics, our policies and our peculiar personalities.
Alaskans have long prided ourselves on being different — we just never wanted to make a nationwide issue out of it.
It’s too late for that now.
It’s not just our governor’s political ambitions and her e-mail habits, or that she is learning how it feels to be at the other end of an ethics investigation.
It’s also the FBI and federal prosecutors, and the potential of losing two of the longest serving members of Congress.
It’s answering for our federal funding requests and our own wealth.
It’s even the comedy writers on the “Daily Show” and “Saturday Night Live.”
And there are still seven weeks to go before the election.
I’d say, “God help us,” but I don’t want reporters questioning my religion.
Getting back to the luncheon topic — “How Politics Translate” – I’d like to talk about how the presidential election really hasn’t changed the discussion all that much in Alaska, it merely amplified it.
Let’s start by going back a few years, when life was simpler, when Senator Ted Stevens and Representative Don Young were in the majority and were chairs of their congressional committees, and all was well in Alaska’s political world in our nation’s capital.
The money was flowing from Washington north to Alaska and we were happy. Alaskans extended one hand to thank our congressional delegation while reaching out with the other hand to ask for more.
Then came the bridges. It doesn’t matter that the proposed steel-and-concrete spans would have led somewhere or served some purpose or created some benefit. What matters is that they were too much, too greedy, and were based on popular politics back home rather than not practical economics.
They came at the wrong time in the national political scene, and just like all roads used to lead to Rome, these roads led to Alaska.
We couldn’t hide from the bad publicity of the earmarks, they were just too large. And we found we had few friends.
They were plenty of critics of congressional spending, eager for just such a perfect poster child of excess.
Plenty of critics in Congress – hello Senator John McCain – and outside Congress too. Republicans and Democrats, fiscal conservative Republicans who decry government spending and liberal Democrats who decry government waste.
The critics didn’t just pounce, they swarmed on the appropriations like bloggers on the latest rumor about Governor Palin’s family.
The bridges were like painting a target on our back and inviting the nation to kick us. We are so rich with our own wealth that we give away half the earnings each year, yet here we were taking hundreds of millions of federal dollars for two very questionable projects.
The bridges caused problems in Washington for two reasons.
First, it drew the public’s wrath upon Congress and became a national joke.
Second, the earmarks ruined the good times for 49 other states. Most members of Congress shared in earmarks, and were happy to do so without a whole lot of attention.
Alaska was the killjoy that piled one too many pieces of rebar on the stack, and it all came tumbling down.
It’s not nice to fool Mother Nature, and it’s not nice to make fools out of 532 other members of Congress.
Some in Congress talked about deleting the funding entirely. Some even tried. Senator Stevens threatened to resign. Representative Young boasted that he had stuffed the highway bill “like a turkey.”
And Alaska looked even worse, as if that was possible.
Then came the 2006 elections and the Democrats took control of both chambers, sending Alaska’s delegation to minority status.
So there we were, with rotten salmon eggs all over our faces for the bridges, our veteran congressional delegation in the minority without a committee chair to call their own, FBI search warrants all over the news, and a new governor looking for headlines.
Along the way, Senator Stevens and Representative Young found themselves under investigation by federal authorities. Some longtime friends in Congress stood up for the two veteran lawmakers, while others privately saw it as a comeuppance long overdue.
Our once powerful congressional delegation was weakened and Alaska was on the downhill side of the federal appropriations mountain.
Then the Minneapolis bridge collapse in August 2007 gave critics of federal funding for the Alaska bridges another opportunity to kick at the 49th state and its congressional delegation.
We were attracting attention once again, and it wasn’t good.
Governor Palin saw an opportunity. She decided it was time to pull out the steel girders from beneath the Ketchikan airport bridge project – never mind that she had supported the project in her run for governor.
The governor had figured out that the bridge was too costly to build, and, besides, it was a good time to get some national publicity for killing the embarrassing project. It might help rehabilitate Alaska’s selfish image.
The state would get to keep the money, so it’s not like we lost any construction jobs in stopping the project.
Oh sure, the governor would upset folks in Ketchikan and maybe others around Southeast, but the area isn’t exactly her base of support anyway.
It was a lot easier in Alaska politics to kill the Ketchikan bridge than it would have been to stop wasting money on the Knik Arm crossing – my words, not hers. Politicians often make decisions by counting votes, and there are a lot more constituents for the Knik Arm project than for Ketchikan.
It might have ended there, with Ketchikan’s mayor leading the charge against the governor for her decision. But she neglected to personally deliver the message to the two guys who got the money for the bridge in the first place – and Senator Stevens and Representative Young were not happy.
That same month, she made Senator Stevens grimace a second time when she stood in front of the federal courthouse steps in Anchorage and told TV cameras that she wanted to hear the senator’s explanation for his alleged misdeeds.
She said the senator owed Alaskans an explanation and put him in a tough legal spot – all this before he was even indicted.
This of a guy who figured no one had ever asked him to explain himself before – Alaskans just said thank you and praised him for his work.
We now had a frosty relationship between our governor and our congressional delegation – and this from a state that knows a heavy frost when it sees one.
You’ve got to feel sorry for Senator Lisa Murkowski in all this. She would just like to do her job and focus on her own re-election in 2010.
Returning to earmarks, Governor Palin has significantly reduced the state’s earmark requests from the years of Governor Frank Murkowski. It was the right thing to do, but even at that she antagonized her own congressional delegation.
Senator Stevens and Representative Young took umbrage with the governor’s frequent, public statements that Alaska should learn to live with fewer earmarks. They mistook it as saying they couldn’t deliver anymore, and they didn’t like feeling they were to blame for past excesses.
Not that the delegation didn’t realize that congressional spending was on the downside. They knew that and accepted it, even warned the Legislature about it.
But Senator Stevens and Representative Young felt as if the governor was insinuating they had conjured up these millions of dollars in Alaska earmarks over the years, adding them to the federal budget on a whim and a corrupt whisper.
Not true. Alaskans had asked for the earmarks. Not always the state, in fact, more requests came from cities and boroughs. Others from nonprofits. And still others from business leaders.
The delegation was only doing what Alaskans wanted them to do. And they weren’t happy at the perception that they had done something wrong.
So they decided to prove they had only done the people’s bidding. They decided to post state and municipal earmark requests on their congressional Web sites.
Take that, they were saying to the governor.
Nothing like a good intramural fight to spice up campus life.
How ironic that Governor Palin’s name on the Republican ticket this November might generate so much enthusiasm and voter turnout in Alaska that she could end up saving Senator Stevens and Representative Young in their re-election bids.
I wonder if they will send her a thank you note?
Back to national politics.
What does Alaska have to look forward to in D.C., especially in our oil and gas world?
Regardless whether Senator Barack Obama or Senator John McCain wins, we’ll have a president opposed to drilling in ANWR.
We’re likely to see a Congress firmly controlled by Democrats and not likely to pass ANWR drilling legislation, regardless who is in the White House – or the vice president’s office.
The American public is damn upset about high gasoline prices, and they seem willing to open coastal areas to drilling, but polls show they’re still hesitant about opening ANWR.
And they certainly don’t like Big Oil.
They are keenly interested in new fuels, wind, solar power, energy-efficient vehicles — and they smile at the notion of a windfall profits tax on oil companies.
They are also worried about global warming and protecting polar bears.
It doesn’t look to me like a winning opportunity to open ANWR.
Meanwhile, Americans do want a steady supply of plentiful, affordable natural gas. I doubt, however, that most Americans really care where it comes from as long as they don’t have to think about it not being there.
Not many cared if oil came from Venezuela, Canada, the Mideast or Alaska as long as it was affordable. High prices make us patriots.
So if we can get a natural gas pipeline built from Alaska’s North Slope to Lower 48 markets, great for us and great for the nation. But if gas from shale formations in Pennsylvania, Texas, Arkansas, the Rockies and British Columbia can supply consumers, the public would be happy, too.
And what about shipping North Slope gas overseas, as LNG?
If you think Congress would stand by and let Alaska send its natural gas to China or Japan or Taiwan or anywhere else, just remember the congressional ban on Alaska exports when the oil pipeline opened 31 years ago.
I believe history will repeat itself if Congress so much as catches a whiff of natural gas heading overseas.
The political uproar would make the bridges look like stream crossings.
Ted Stevens with a dozen Hulk ties wouldn’t be able to block efforts to stop Alaska natural gas exports.
We saw a hint of it last week when Oregon Senator Ron Wyden called on the U.S. Department of Energy to revoke its recent order extending the export license for ConocoPhillips and Marathon’s Kenai LNG plant.
Makes no sense to send natural gas to Japan when we need it at home, said the senator.
It doesn’t matter that there is no easy way to get gas from Cook Inlet to U.S. markets. This is all about politics, and Alaska is an easy target.
And while we’re talking about Alaska natural gas and national politics, let me give you my opinion on the possibility of additional federal financial support for the proposed North Slope gas pipeline.
Congress in 2004 approved accelerated depreciation and hundreds of millions of dollars in tax credits for the pipeline and gas conditioning plant. It also approved federal loan guarantees for the project – now up to almost $20 billion in potential guarantees.
It wasn’t easy getting those incentives, and Congress figured that would be enough to get the line built – along with the state chipping in something, too.
Now TransCanada comes along and says in its gas line license application to the state that it sure would like more help from the federal government.
The company would like to see the federal loan guarantees used to cover any construction cost overruns, with users of the line getting the option of repaying those loans only when natural gas prices exceed a minimum threshold.
Sort of like if your home construction goes over budget, you only have to pay the full mortgage if you can afford it. If not, well, the feds will cover the debt until you can.
The idea for the gas line is that shippers would be protected from high tariffs when gas prices are low, preserving their margin.
And in another attempt to lessen the project risk, TransCanada wants the State of Alaska to help lobby the federal government to sign shipping contracts for the pipeline. TransCanada could use those contracts to get financing for the line. They call it a “bridge shipper.”
Sorry, but they should have thought of another word. Linking bridges and Alaska in the halls of Congress is not a winning combination.
The idea is that in case no producers or gas or electric utilities sign up to use the pipeline, or not enough of them sign up, the federal government would step in and sign binding contracts to ship gas it doesn’t have down the line.
In theory, says TransCanada, the North Slope producers and others would see the light at the end of the pipe before it is completed and buy up the shipping commitments from the federal government.
The U.S. treasury would be off the hook, gas would flow down the line, and everyone would live happily ever after.
But what if no one steps up to take over the full shipping commitments from the feds? It could become a costly venture for the U.S. treasury.
Regardless whether the plan would work, you would first need an act of Congress to allow federal commitments as a bridge shipper.
I’m going to stage a one-act play of what that might look like on the floor of the U.S. Congress. Since I wrote the script, I get to play the lead.
“Madame Speaker, I rise In support of pledging federal taxpayer dollars to protect ExxonMobil, BP and the like from the risk of construction cost overruns.
“And I support pledging U.S. taxpayer funds to front the shipping contracts needed so that a Canadian company can build a gas line for those same mega-multinational corporations that are reluctant to commit their own money to the project.
“I stand in support of writing these blank checks on the U.S. Treasury, despite the fact that my constituents resent Exxon, BP and the entire oil industry for their record profits and record prices at the gas pump.
“And, yes, I acknowledge that the companies are using much of their profits to buy back shares — making more profits for their shareholders rather than investing in more oil for my constituents.
“From all this, Americans will get natural gas, but we don’t know how much it will cost.
“Please join me in voting yes for Big Oil.
“All in favor, say aye.”
Silence; the curtain falls.
Whether you call it a tragedy or a comedy, I just don’t see enough votes to get it passed, not in today’s political climate of anti-oil companies and pro-windfall taxes, anti-special interests and constant bad press about Alaska’s corruption and multibillion-dollar budget surpluses.
We give away billions to ourselves, pay no state taxes, yet want the U.S. treasury to take the risk so that we can make billions more. No amount of patriotic flag-waving is going to make the deal attractive to Congress.
So where does all this leave Alaska on the national level?
Wounded in Congress due to indictments, more grand juries and a legacy of earmarks.
With no sympathy from the rest of nation as they see our wealth vs. their foreclosures, their job losses and their recession.
All the while standing on the center stage, as our governor puts on the performance of her life.
Back home, we’re still talking about opening ANWR, suing over polar bear protections, and arguing that oil and gas development is not necessarily to blame for global warming.
Alaska is at the opposite end of national opinion on some big issues.
We can continue to stomp our feet and marginalize ourselves as we fight the old battles the old ways, or we can look at other issues we share with the rest of the nation and work toward solutions.
We can look to make a little nicer with the rest of the country and see what it gets us for a change.
It’s time to stop saying we don’t care how they do it Outside and start paying more attention to how we look to those Outside. |
