blog2007: Alaska: Image problem plagues gas line

Alaska: Image problem plagues gas line

PORK: Official says corruption probes aren't the big obstacles.

By STEVE QUINN
Anchorage Daily News
September 29, 2007

Recent federal corruption convictions, pending trials and ongoing political corruption investigations won't hurt the state's efforts to get a gas pipeline built, said Drue Pearce, the federal coordinator for Alaska's gas line project.

Pearce spoke to The Associated Press this week while former House Speaker Pete Kott was convicted on bribery charges, the second former state lawmaker to be found guilty of corruption this year.

Pearce is a former president of the state Senate. She said the hurdle is letting the rest of North America know that shipping North Slope natural gas means heating for Lower 48 homes and business, not simply a lining of the state's pockets.

This means overcoming an image of Alaska as the national symbol for pork barrel spending, which happened when the state received two multimillion-dollar earmarks for projects dubbed "bridges to nowhere." The governor scrapped one of those projects last week.

"There is a sentiment widely held throughout the Lower 48 that Alaska is spoiled and not worthy of largess from the federal government," Pearce said. "They think, 'Gee, they just want a gas pipeline for themselves,' " she said.

"That's why it's so important that people understand that this is a North American project, not an Alaskan project."

Congress ordered the creation of Pearce's job in 2004 to help speed federal review of the proposed pipeline.

Her role is that of a facilitator, even a mediator if necessary, but she is not a policymaker.

She cannot overturn certain orders from the Federal Energy Regulatory Commission, and she cannot impose her own terms and conditions on the project.

WHICH PIPELINE?

So far there is no concrete project, just a proposal.

State lawmakers passed Gov. Sarah Palin's Alaska Gasline Inducement Act last spring and the administration is awaiting applications to pursue a pipeline project.

Former Gov. Frank Murkowski had a deal last year with North Slope leaseholders BP, Exxon Mobil Corp. and Conoco Phillips to set tax and royalty terms should a pipeline get built.

But there was no guarantee construction would happen. The Legislature did not like the terms and never voted on it, so Palin started over with a more inclusive plan.

Pearce said progress has been made since the Murkowski deal fell through last year.

"The governor is certainly moving the ball," Pearce said. "On Nov. 30, she is going to have some number of conforming applications to commit to moving forward a project. That is movement we didn't see with the contract negotiations between Gov. Murkowski and the producers."

No pipeline route has been established. That will be part of the proposal in the applications submitted to the state.

Most discussions have surrounded the prospects of a line going from the North Slope into Canada and eventually to the Midwest markets in the Lower 48.

Also, under consideration would be a line that could ship gas to a liquefied natural gas plant in Cook Inlet, then delivered it to West Coast markets.

"We will deal with any project that comes into the door," Pearce said.

The Palin plan would issue one official license to pursue a pipeline, with perks to the winner such as $500 million to help cover startup costs. But companies not winning the license could still seek federal certification to build a pipeline.

It's an issue not widely discussed in the Capitol, but more than one application to federal regulators could be a problem, Pearce said.

"It would be a nightmare to have two federal applications, and that's a concern," she said. "No one has to have a state license to come to the feds with an application."

THE CORRUPTION INVESTIGATION

The specter of political corruption in Alaska won't go away soon.

That's because one former lawmaker, Rep. Vic Kohring of Wasilla, awaits trial Oct. 22.

Two former state legislators were convicted in recent months of taking bribes. And the probe into other state and federal officials continues.

"I have some concerns about it, but that's because I'm an Alaskan," she said. "None of us know how long this is going to play out or what affect it's going to have.

"But, I can honestly say I haven't had anyone link them and ask me if I thought it was going to have a major impact on the gas line."