Berkowitz challenges Parnell on oil and gas policies

Posted: Thursday, September 23, 2010

Republican Gov. Sean Parnell and Democratic challenger Ethan Berkowitz tangled before the Alaska State Chamber of Commerce's convention Wednesday.

At a luncheon debate moderated by KT00's Bill Legere, Parnell staked out a pro-oil development position, an easy stance to take in front of the state's top business group. Then Berkowitz took an even more pro-oil position than Parnell had.

"Alaska is the worst place in the country to do business," Berkowitz, a former minority leader in the Alaska House, told chamber members.

Berkowitz criticized both the state's oil tax system, the Alaska's Clear and Equitable Share Act, proposed by Parnell and former Gov. Sarah Palin, and passed with a bi-partisan legislative coalition that included many of Berkowitz' former Democratic caucus, as well as Parnell's natural gas pipeline efforts.

Parnell, also with Palin, backed the Alaska Gasline Inducement Act, under which TransCanada is developing a pipeline from Alaska's North Slope gas fields.

"If AGIA fails, and it sounds like it has, we need a plan 'B,'" Berkowitz said.

Berkowitz has proposed new oil tax systems and use of permanent fund dividends to develop a natural gas pipeline.

Parnell challenged many of Berkowitz' assertions.

Berkowitz, he said, is proposing spending billions of state dollars and taking in billions more in debt to develop an entirely new project without access to gas or buyers for that gas.

The AGIA process is making progress towards a pipeline, he said.

"At this point we have one open season, with major shippers committing significant volumes of gas," he said.

Parnell acknowledged there may be conditions put on those bids, which was completely normal.

And the AGIA process will be ensure that its pipeline is developed to protect Alaska's interests, including low tariffs, five in-state off-take points and distance sensitive rates to benefit Alaska gas users, Parnell said.

Those commitments of gas into a pipeline are the first ever to happen in Alaska, and are for a private-sector project.

Alaska should be writing checks as a last, not a first resort, he said.

"Don't sweep aside those private sector parties," he said.

Berkowitz challenged Parnell's claims for how much his proposal would cost, and renewed his attacks on AGIA.

"AGIA did nothing but buy a process; it did not buy a pipe," he said.

"I don't want a process, I want a pipe," Berkowitz said.

Berkowitz also blamed Parnell for the response of the Palin-Parnell administration to the closure of Agrium, the Nikiski-based natural gas-fueled fertilizer manufacturer.

"I watched the demise of Agrium, a major industry on the Kenai," he said, and the administration did nothing.

"There was no action, there weren't even words," he said.

Parnell countered with the political ranking of the National Federation of Independent Business. It gave him a 100 percent rating, while Berkowitz got 33 percent, he said.

Berkowitz dismissed the NFIB comparison.

"Those rating are designed as campaign tools," he said.

Berkowitz also took up the oil industry's regular request for "fiscal certainty," from the Legislature and said he now supported it.

"If we can't offer fiscal certainty it creates an investment climate that drives investors away," Berkowitz said.

Parnell said he's supported tax credits for drilling on the Slope, and incentives to bring a new drill rig to Cook Inlet which will significantly lower the cost of exploration there.

• Contact Pat Forgey at 523-2250 or

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