Emperor’s Rants and Observations

The Federal Energy Regulatory Commission report to Congress said any applicant proposing to build a multibillion-dollar pipeline to carry North Slope gas to market ideally should have firm commitments from producers to ship the gas on the new pipeline.

Many predicted this exact scenario when AGIA was “debated”.

People said there would few if any qualifying offers. We got one

People said that it was going no where without commitments from producers to ship gas through the line.

People said that AGIA would only delay the process further and we would be no closer to the reality of a Gas Pipeline at the end of Palin’s term than we were at the beginning.

People warned that Palin was not going to bully the producers into making a deal that was too risky without a commitment on taxes.

Also, let’s applaud the one man in the legislature, Ralph Samuels, that had the courage of his convictions to vote against AGIA in the wake of the Veco scandal for this exact reason.

Alaskan Best Search - Ralph Samuels

AGIA was a giant step backward. It didn’t produce the competition Palin promised. And yet she steadfastly refuses to consider the proposals of Conoco-Phillips or the Alaska Gasline Port Authority.

The fact is that Palin and her underlings have been wrong every step of the way. Each passing day we are further and further away from making the pipeline a reality.

Alaskan Best Search - Alaska Gasline Port Authority
Alaskan Best Search - ConocoPhillips Gas Pipeline

Palin has committed 500 Million dollars to a company that probably won’t even qualify to get the required permits because they have no gas to ship.

Here is the Murkowski negotiated contract.

You can find all of the supporting documents here.

There is no pipeline if there is no commitment to ship gas. There is no commitment to ship gas without stable long term agreement on costs to the producers. Nobody in their right mind would commit to hundreds of billions of dollars in any project without knowing the the long term costs. Nobody is going to bully the oil companies into making that kind of investment. Even with the bribe of 500 Million dollars the state was only able to get one “qualifying” offer. That alone should be enough to convince anyone how far off Palin is in her thinking.

I can’t fathom why these simple facts are so hard for some people to grasp.

Are we, as a State and people, willing to invest the billions of dollars and take all the risk to develop our vast resources? For instance, are we willing to invest the nearly 40 billion dollars in the Permanent Fund into developing and bringing our resources to market?

There is a good deal of empty rhetoric about how the resources are “ours” and we should dictate and control how and when they are developed. However, whether it is Oil, Gas, Fish, Timber or Minerals it’s private enterprises that take the risk, make the investments and provide the labor and expertise needed. What role should the State take other than landlord, and recipient of taxes, fees and royalties?

Alaskan Best Search - “Natural Resources“

This entry was posted on Monday, March 3rd, 2008 at 3:30 pm and is filed under Palin, Gas Line, Politcs, Business, Oil Industry. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.