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“

Agriculture in Alaska has had a rocky and tumultuous history with government involvement going back to 1897. From the “Evolution of the Cooperative Extension Service in Alaska“:

The earliest reference to this work is found in a report by Secretary of Agriculture James Wilson: The first appropriation “to enable the Secretary of Agriculture to investigate and report to Congress upon the agricultural resources of Alaska, with special reference to the desirability and feasibility of the establishment of agricultural experiment stations in the Territory,” became available July 1, 1897

Throughout the history of Agriculture in Alaska long, vulnerable supply lines have been the primary justification for expending government funds and resources on development and support of agriculture. Not much has changed in 100 years. In fact, Alaskans may be more vulnerable to supply disruptions today. Man made or natural disasters could cut off supplies for an extended amount of time. Rising fuel costs could push the cost of food, particularly fresh fruits and vegetables, dairy products, meat and poultry, up to the point where many Alaskans couldn’t afford to feed themselves without assistance.

So what is the right and proper role of government in supporting Alaskan agricultural self sufficiency? At one extreme we have the school of thought that it should be left completely to the private sector and allow the free market to determine the winners and losers in agriculture. This would be fine in principle, but ignores the fact that there is no incentive for the free market to protect Alaskans from disruption in the supply of food. Unlike other segments of the private sector farming takes years in some cases to bring a product to market in competitive response to high prices. The size of investment required to start a farm would be too great of a risk for the private sector. At the other extreme would be heavy government subsidies, price supports, ownership, control, and management of transportation, storage and processing facilities. Government simply is not structured to take on the responsibilities of the private sector in this manner. This is a recipe for waste and mismanagement. I think it’s evident that there is a role for government to play in Agriculture in Alaska some where between these two extremes.

Like many other issues in Alaska, there is a lack of vision and long term goals for agriculture in Alaska. Perhaps the most valuable contribution that government can make would be to bring together all of the stake holders to create that vision and set goals for the industry. Their doesn’t appear to be an governmental entity that is charged with that function. The Alaska Board of Agriculture and Conservation (BAC) should have their function expanded to include overseeing the process of developing long term goals and identifying areas where the state may assist private industry in attaining those goals through loans, research, marketing support and coordination with other government agencies and services. If government is going to be involved it has to be in a coordinated, planned support role. Not just tossing money around in the hopes that something will stick and work.

Since Queen P has fired and replaced the members of BAC, this would seem to be a good time to consider expanding their role. However, the first order of business has to be to address the Matanuska Maid crisis. Closing the dairy prematurely could be the tipping point for the demise of agriculture in Alaska. There will be plenty of time to figure out what went wrong and why the Creamery Board decided to close the dairy so abruptly. Right now we need to protect the fragile agricultural industry while moving as quickly as possible to get the dairy into private hands without the constraints of being a government owned entity. Saving agriculture in Alaska depends on propping up the dairy industry in the very short term - three to six months. That should be sufficient time to provide longer term solutions not requiring significant government cash support.

Technorati Tags: Alaska, Matanuska Maid, Dairy

adn.com | money : Governor gets a frosty reception from Mat Maid

“We can’t have a whole entourage waltzing through the dairy,” he said. “You just can’t do that unannounced like that and come in. I don’t care what anyone says. The fact is everybody is treated the same. I don’t care whoever you are.” Palin and the board, which oversees operation of Mat Maid, have been sparring over the decision to close the dairy.

…give me a minute while I compose myself. I have been having laughing fits everytime I think of the Good Queen P sitting in the lobby of a dairy waiting for permission to enter the STATE OWNED DAIRY. I don’t care who you are, that’s funny rite thar.

Ok. So where to go from there.

It really doesn’t make much sense to throw good money after bad. I’m sympathetic to the farmers and the employees of Mat Maid. It also concerns me because any disruption in the supply lines into the state like another Teamsters strike, and we could be without fresh dairy products which isn’t a good thing.

What can we do to keep the farmers and dairy in operation without wasting more money. What could be profitable?

Alaskan Premium Ice Cream.

HotLicks Homemade Ice Cream in Fairbanks has a proof of concept operation. We connect them with Authentic Alaskan Native Made Syrups and Alaska Wild Berry Products. We cut a deal with Princess Lodges and Tours to be the exclusive Ice Cream source for them. We get it into the finest restaurants around the state. We get it into the duty free stores wherever Alaska Airline flies. We package 1/2 pint sizes for sale on Alaska Airlines flights like they do with Alaskan Beer. Alaskans passion for Ice Cream is legendary. We should capitalize on that status and market our own brand of Premium Ice Cream. Let’s get this thing going, who do we contact at Made In Alaska, Alaska Grown (sell it at the farmers markets around the state) and Buy Alaska. Perhaps the Alaska Small Business Development Center can help develop a business plan and find investors or a loan. Are there any grants available for the Dairy Farmers that may help?

Perhaps we need to look at this as an opportunity rather than a problem. Clearly a new approach is needed, and trying to bully the creamery board didn’t work out so well. Perhaps an approach like Cooperative Community Marketing would work where we involve a wider circle of stake holders. It’s part of Alaska’s history, and is worth saving if we can. I’m ready to help if others are interested, you can email me.