Former Governor Wally Hickel touts a state-built all-Alaska gas line...
TransCanada plan isn't best for state
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WALLY HICKEL
COMMENT
Published: March 15th, 2008 11:14 PM
Last Modified: March 15th, 2008 03:01 AM
It was sad to learn that Jim Clark, chief of staff to former Gov. Frank Murkowski, was involved in a felony conspiracy. His tragedy was a mistaken view of the role of the public and private sectors in our Owner State and his willingness to break the law to advance his beliefs.
At the outset of the Murkowski administration, I met with Gov. Murkowski and Jim regarding the natural gas pipeline. Throughout their four years in charge, we maintained a continuous, and sometimes heated, correspondence on the issue.
I told them over and over, "Don't ask the industry what they will do. Tell them what they must do."
That is the role of the sovereign in an Owner State. It's our land and our oil and gas. The producers are welcome guests. But they don't own our resources, and they don't own us.
The Murkowski team was convinced that the only way to get a gas line was for the producers to build it. They vowed they could cut a deal to make it happen and stubbornly maintained their course.
The more they negotiated, the worse the deal became. By the time they had a contract, they had accepted the majority of the industry's demands. The list of giveaways was outrageous, including absurdly low state tax rates locked in for 30 years for oil and 45 years for gas.
To complete the deal, they needed legislative approval. Frank's term was ending, and if he weren't a candidate for re-election he would lose the power of the incumbent to sway the Legislature. To test the political waters, Jim admits that he secretly sought the support of Veco to fund a public opinion poll and hire a political consultant. These under-the-table acts violated the law.
All was for naught. Sarah Palin beat Murkowski in the August 2006 Republican primary on a platform of integrity. Since then, her ethics bill and the Alaska Gasline Inducement Act have ushered in a new era of honesty in public service and open, competitive negotiations regarding Alaska's resources.
Now, still to be resolved, is how to work with three of the largest oil companies in the world who, for their own corporate reasons, are in no hurry to build a gas line and remain adamant that Alaska's tax regime must be set in stone for decades.
Illustrating their muscle, armies of Exxon Mobil attorneys are asking Department of Natural Resources Commissioner Tom Irwin to reverse the decision by Gov. Murkowski's administration to rescind the Point Thomson unit agreement. That move, long overdue, placed the most valuable undeveloped oil and gas field in North America back in the hands of those who own it, the Alaska people. Given Exxon's track record and its arrogant attitude toward a gas line, the appeal should be denied.
Meanwhile, the Palin team is scrutinizing TransCanada, the only gas line applicant that made it through the hoops created by the AGIA process. Success for the TransCanada proposal depends on the three producers and solving a maze of problems in Canada. It will only lead to more delay and does not merit state support.
Instead, the Palin team should call for a second round of AGIA applications. This is the biggest decision of this generation, so let's get it right.
If the second round doesn't produce a viable alternative, the state should build an all-Alaska gas line itself. It's completely doable, fits our ownership of the Alaska railroad, airports, hydro projects and the Permanent Fund and promises even greater rewards.
If and when the Palin team makes that decision, it won't have to start from scratch. Through AGIA, it has become acquainted with several outstanding companies and entities that want to participate in building an all-Alaska line. The state can assemble a consortium of the best to build a line much faster than the Canadian option.
When this happens, Gov. Palin and her team will demonstrate for all future generations the correct relationship between the public and private sectors in an Owner State. And Alaska will have a solid foundation of energy for our people, revenues and jobs for many years to come.
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Walter J. Hickel served as governor of Alaska from 1966 to 1968 and 1990 to 1994 and as U.S. secretary of the interior from 1969 to 1970. His latest book is "Crisis in the Commons: the Alaska Solution." |
