Oil Savvy               By Ray Tyson     



                                                                              
How did Sarah Palin do it?
I asked her good friend Adele Morgan

   As a politically baffled former Alaskan, I’ve often wondered how Alaska Gov. Sarah Palin, presidential hopeful John McCain’s pick for vice president, managed to beat Republican incumbent Frank Murkowski in the 2006 gubernatorial primary and former two-term Democratic governor Tony Knowles in the general election to become Alaska’s first woman governor; and, by virtue of her high standing, the chief overseer of Alaska’s considerable oil and gas resources.
   Moreover, and certainly more mind-boggling, is why McCain selected a virtual nobody on the national political scene to be his running mate and, if elected, would become the first woman president of the United States should McCain become seriously incapacitated or die in office. There’s gotta be something special about this lady.

Alaska is a big place but a small world

   Alaska is a big place -- much larger than Texas and  perhaps a third the size of the continental U.S. But considering its tiny 
population,  Alaska  is actually a small world when it comes to 
people knowing people you know. Palin’s father, Chuck Heath, was my 32-year-old son’s fifth grade teacher. And my wife’s cousin, Adele Morgan, an accomplished Alaskan singer-songwriter, just happens to be a life-long friend and political ally of Palin. The two met in grade school, and Adele once dated Palin’s brother.
   So naturally I turned to Adele, who thus far has turned down two offers to run for the Alaska Legislature, for an insider’s view of Palin  and her  character.    Adele, who provided enough information to fill a dozen columns during our two-hour phone chat, summed up her friend this way: “She’s got a great personality. She’s got a ton of charisma. She’s got tenacity like you would not believe. She’s super thick- skinned. And she has a purpose to serve the people. So when she says (something), she means it. She’s not just reading it from a script.She’s a maverick. She’s a reformer.”
   I have never met Sarah Palin. But I am well acquainted with the two former governors she defeated at the ballot box. I served as Murkowski’s press secretary during his first successful run for the U.S. Senate in 1980. And, as a daily newspaper reporter, I 
interviewed Knowles on numerous occasions throughout his long political career, including stints as mayor of Anchorage and earlier as a member of the Anchorage Borough Assembly.
Both men were capable governors with solid track records; and, while they had their political enemies, generally worked well with Alaska’s oil and gas industry and its three most prominent and powerful members -- ExxonMobil, ConocoPhillips and BP -- which together provide the lion’s share of state revenues though royalties and taxes on North Slope  production, most notably on oil from the giant Prudhoe Bay field, the largest-ever discovery in North America.
   However, neither Murkowski nor Knowles, along with a bunch of other governors dating back a couple of decades, could push through the necessary state legislation to bring the North Slope’s other abundant but stranded resource, natural gas, to Lower 48 markets. Needless to say, this was and is an expensive proposition for industry -- perhaps as much as $30 billion in private investment for production facilities and a 1,700-mile pipeline to transport around 4.5 billion cubic feet of gas daily from the North Slope into Canada and ultimately to the Lower 48 via other existing pipeline systems. Moreover, hammering out a leak proof agreement that satisfies both producer demands and the state’s tax and royalty regime probably has been more challenging than rounding up the cash to build the gas pipeline itself.

Alaska gasline will require producer approval

   There’s much work to be done before an Alaska gas pipeline can become reality, so Gov. Palin cannot take credit for an all important deal that did not exist at this writing, namely gaining the support of Alaska’s Big Three producers. Let’s face it! Without their consent and participation, the gas pipeline just ain’t goin’ no where, no how. And, while Palin’s independent spirit and tough guy approach to politics and state government no doubt  remain popular with  the voters who put her in the state’s highest office, the governor is not exactly beloved by Alaska’s oil and gas industry, based alone on her rousing speech to the Republican National Convention: “We shook things up. Despite fierce opposition from oil company lobbyists, who kind of liked things the way they were, we broke their monopoly on power and resources.”
   Nevertheless, the governor certainly can take much of the credit for moving a seriously bogged down project forward in a big way by working closely with the Alaska Legislature to award a state license to TransCanada to pursue federal certification for the natural gas   pipeline. “It will be our Alaska gas flowing to provide aid to those in the Lower 48, who are turning to Alaska, waiting and wanting Alaska to help,” Palin said after the legislature’s support.
   The license, awarded under the Alaska Gasline Inducement Act, initially attracted five companies in addition to TransCanada.   Meanwhile, BP and ConocoPhillips are working on their own pipeline proposal called Denali, which further demonstrates the wide gap between the state and North Slope producers.

Sarah Palin’s political beginnings

   Unlike her predecessors, Palin’s move through the Alaska political system was initially unremarkable, serving two terms on  the city council in Wasilla, population 6,000, and then two terms as Wasilla’s mayor. After an unsuccessful campaign for lieutenant governor, Palin was selected by the Murkowski administration to chair the Alaska Oil and Gas Conservation Commission from 2003 to 2004  while also serving as ethics supervisor of the commission. True to her growing 
reputation as a reformist, Palin resigned after alleging that the 
commission was rift with corruption. Thus was born Alaska’s next governor and, perhaps, America’s next vice president.

 

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