Alaska editorial: Lawmakers are feeling Exxon angst

Posted: Monday, June 29, 2009

There's an old proverb that says even a fool seems wise when he keeps his mouth shut.

Apparently this wisdom is lost on a couple of our state legislators, as they have spoken publicly to espouse their angst regarding ExxonMobil and TransCanada forming a partnership to move the gas pipeline project forward.

Should we laugh or cry? For instance, when state Rep. Bill Thomas, R-Haines, states in a press release, "I'm disappointed with the partnership. Exxon's involvement will qualify them for some of the $500 million that Alaska will give to TransCanada to work on the line"

Not wanting to be left out, during a House Resource Committee hearing in Anchorage on June 23, Rep. Bruce Edgmon, R-Dillingham, was upset and so eloquently portrayed his displeasure when he retorted that Exxon, the "largest corporation on the planet," may now receive reimbursement funds via TransCanada due to their recent agreement.

Our collective legislative foresight is frightfully underwhelming. May we kindly remind Reps. Thomas and Edgmon that they, wholeheartedly and being of sound mind and body, cast a vote in favor of the Alaska Gasline Inducement Act a few months ago?

The purpose of AGIA, according to the masters who crafted it, was to open the project to private enterprise in a competitive manner that would allow the licensee to partner with one or multiple entities to bring the project to fruition.

Would anyone in the Legislature who didn't Rip Van Winkle through the entire process have remotely imagined that ExxonMobil, the largest holder of natural gas on the North Slope, might elect to begin their gas development activity by choosing to partner with TransCanada, the very entity that Thomas and Edgmon sanctioned,when they cast their "yes" vote, giving their blessings not only to the project but specifically to the licensee?

After all, TransCanada is acting in the exact manner that was hoped for. Company officials negotiated with ExxonMobil representatives to bring Exxon on as a powerful partner in an attempt to gain leverage and expertise, thereby enhancing the project's viability. Is this not true?

They now have the largest, most successful, expert company in partnership; this at the behest of the administration and Legislature, implicitly via their collective nod of agreement in crafting and passing AGIA.

We now have exactly in place what was hoped for, and it's what AGIA was designed to do. Yet somehow the very folks who voted for this project and its adherents are upset? Is this believable?

If our legislative hackles begin to flare at the possibility of a few measly millions being funneled to Exxon in exchange for valuable work, then our alignment with reality needs recalibrating. The state of Alaska is risking a lot more money than that of potentially exposing our leaky coffers to the tune of a couple of billion dollars.

For example, if TransCanada has expenditures in the $600 million range and something goes awry and the state wants out of the deal, the state is liable for up to triple that amount, including the $500 million already spent, bringing the total exposure to something north of $2 billion.

Are we to hold Exxon in the dock forever because of the tragedy in Prince William Sound more than 20 years ago? Doesn't seem reasonable to us, but reason is something seemingly growing dimmer as we become smarter and more sophisticated.

Alaska, do you want even the possibility of a gas pipeline project? If your answer is yes, then you should applaud the recent partnership between TransCanada and ExxonMobil.

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