AGIA critics may pick up fight

Transition from Palin to Parnell stands to invigorate opposition

Posted: Thursday, December 10, 2009

Alaska's effort to build a natural gas pipeline under 2007's Alaska Gasline Inducement Act is either finally making progress after years of delay, or a costly disaster which will cause further holdups, depending upon the commentator.

AGIA may have been the centerpiece of former Gov. Sarah Palin's administration, but her replacement by Gov. Sean Parnell has given some AGIA opponents renewed hope that they'd be able to roll it back.

Soon after Palin resigned, her predecessor, Gov. Frank Murkowski, emerged to criticize AGIA. He said the state should instead offer tax breaks on oil and gas to encourage gas lease holders to build their own pipeline.

"AGIA has simply got to go," Murkowski said.

Parnell said early on, however, that he'd be sticking with the plan that the Palin-Parnell administration pushed through the Legislature despite objections by many top Republicans.

"I'm committed to the AGIA framework," Parnell said.

AGIA has the state backing an effort by TransCanada Corp. to build a pipeline to bring Alaska's huge reserves of natural gas to North American markets.

TransCanada, with new partner Exxon Mobil Corp. is eligible for $500 million from the state to subsidize development of the pipeline. In exchange for the cash, Alaska wanted extra commitments that the pipeline would be open to other shippers as a way to spur more gas exploration and development.

The AGIA license that TransCanada was awarded by the state also requires it to push forward to a Federal Energy Regulatory Commission even if the gas lease holders withhold their gas when TransCanada seeks bids during next year's open season.

The state's most outspoken AGIA opponent, and the only one of 60 lawmakers to vote against it in the face of Palin's 2007 popularity, is former Rep. Ralph Samuels. He announced this week a run for governor against Parnell in the Republican primary.

Since her resignation, Palin focused most of her attention on national issues, but Anchorage's KTUU-TV caught up with Palin during her "Going Rogue" book tour, where she remained committed to AGIA and advised the Legislature to begin with the process they committed to in 2007.

"We need to remind the lawmakers of their enthusiasm and that overwhelming support to get this gasline off the dime," Palin told KTUU's John Carpenter.

"We can sit around and keep talking about it, but Alaskans are expecting that their lawmakers remember what they voted for, remember all the hard work that lawmakers put into crafting the bill with the administration and adopting it, and let's move forward."

Parnell may have more difficulty with the Legislature than did Palin, who reached around Republican leaders to get support form rank-and-file Republicans and Democrats to win passage of AGIA.

Much of the opposition to AGIA comes from legislators who say Murkowski is right in his criticisms, and the way to get a gas pipeline is to negotiate tax deals or subsidies with the big oil producers that hold rights to most of the state's natural gas leases.

"The only thing standing in the way of an Alaska gas pipeline is the Sarah Palin administration," Rep. Mike Hawker, R-Anchorage, told writer Joe McGinniss for an article in Portfolio magazine.

At the end of the last session, Rep. Craig Johnson, R-Anchorage, co-chair of the House Resources Committee, introduced a resolution seeking to reconsider AGIA. Johnson introduced the bill toward the end of the 2009 Legislative session but then quickly withdrew it.

Despite recent criticism of AGIA and discussion by some lawmakers about repealing the act, Parnell said he's sticking with the current plan, at least for now.

Parnell said one thing he won't allow is for AGIA opponents to "pit Alaskans against ourselves" and give up the progress that's been made so far.

"In the end, if something different is required to get a gasline, I'm open to listening," he said.

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