Alaska editorial: Legislators should scrutinize Palin's pipeline proposal

Posted: Thursday, April 26, 2007

This editorial appeared in the Fairbanks Daily News-Miner:

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Why do many legislators down in Juneau seem to be ready to slap an "AGIA or Bust!" sticker on their office doors without bothering to ask whether they can actually get to where they think Gov. Sarah Palin's gas line proposal is supposed to be taking them?

It's a question in need of an urgent answer, because if those legislators go "bust" with the governor's Alaska Gasline Inducement Act, they'll be taking the rest of us down with them.

That prospect ought to wake up everyone in and out of the Capitol.

The risks and benefits of taking Gov. Palin's approach ought to be weighed against the risks and benefits of reviving and reworking the draft pipeline agreement reached in 2006 by the Murkowski administration with ConocoPhillips, Exxon Mobil and BP.

What Alaska's legislators should be asking is this: "Which approach will lead to construction and operation of a gas line fastest and with the greatest benefit to the state?"

It's a basic question, and legislators need help in getting the answer. They need to bring in a variety of outside consultants as soon as possible to help them. Consultants were ever-present during the legislative analysis of the draft agreement reached by the Murkowski administration, and while there were admittedly many more details to vet in that agreement than there are in Gov. Palin's pipeline legislation, the consultants are needed now nonetheless.

The difference between the Palin and Murkowski approaches is fundamental.

Gov. Palin hopes to attract one or more proposals for construction of a pipeline, with the state ultimately settling on one and locking itself into dealing with that one winner - for good or bad - for a long period of time. But if the winning proposal isn't the one from the oil companies that hold the leases to the North Slope gas, then what? If the companies decline to make the gas available, Gov. Palin and her team believe that external pressure, from the public and from national leaders, can be brought on the oil companies to convince them to sell the gas. Going to court to reacquire the leases from the companies isn't an appealing option for getting the gas, since virtually all of those involved believe the effort would take far too many years to conclude.

Under the Murkowski approach, which ultimately ran out of time when voters ran Murkowski out of office, a heavy effort was put into reaching a pipeline agreement with Exxon Mobil, ConocoPhillips and BP. The Murkowski team dealt primarily with the three companies, figuring it to be the fastest way to see a gas line to fruition since the companies hold the leases, though it did hold discussions with other companies and entities that proposed building the line. The downside of having the big three companies build the line, in the view of members of the Palin team and of others, is that the companies would have near total control of the North Slope.

Which way is best? This is the debate that Alaska should be having.

Will the AGIA work or will it actually set Alaska back by several years in pursuit of the gas line. Or will it kill a project altogether?

Yet there's reluctance in the Capitol to pursue answers to those questions. Do legislators not want to be seen opposing a popular governor? Does a fear of even mentioning the name "Murkowski" preclude legislators from initiating a reasonable debate about whether the prior agreement should get a second look?

Evidence of this reluctance comes from recent comments made by a couple of legislators. Rep. Ralph Samuels, the Anchorage Republican chairman of the Legislative Budget and Audit Committee, didn't see much need for consultants since, in his view, all the Legislature is doing with the gas line now is "just setting up a process." To Rep. Samuels, we say this is "just" about the future of the state.

And then there's this from Rep. Mike Doogan, Democrat of Anchorage, who offers that "I don't think it's clear to anyone exactly what we would analyze."

To answer the question for Rep. Doogan: Analyze, for all of us, Gov. Palin's gas pipeline approach. Will Alaska be risking further delay in adopting her plan for getting a pipeline or would the state be better off in renewing work on the agreement put forward by her predecessor?

The Legislature, as we have said many times here, must act as the public backstop against ideas that could be bad for the state. It must ensure that Alaska is on the best course for getting a natural gas pipeline, whether that course be reviving the Murkowski agreement or continuing with Gov. Palin's approach.

It needs to find the answers for us, and it needs to get itself some help to do it right.

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