Here’s a memory: It’s 2007, and I’m at the Loussac Library’s Wilda Marston Theater, with about 200 other Alaskans, listening to members of Gov. Sarah Palin’s administration explain a new plan that they promised would finally, after more than 30 years of trying, get a natural gas pipeline built. It was called the Alaska Gasline Inducement Act, or AGIA, for short. And it’s was a different plan than any other plan that had been floated in the 30 years that plans had been floated.
The difference: Historically, the energy companies that hold the lease rights to the gas had been the ones that were going to make the decision about when and how to build the line. They were, in effect, in the driver’s seat. This plan, however, would separate the line from the producers. AGIA was structured in such a way as to allow—in fact to favor—a third party to come into the state and build the line. The assumption was that if the pipeline was built, then the producers would make the smart and prudent business decision and sell the gas to buyers. They would have to. Their shareholders would demand it.
It was a radical rethinking of the project. The producers—among the biggest private energy companies in the world—would be put in a corner. We were, at long last, going to outsmart them.
I’m not sure why I was in the audience. I wasn’t writing about the pipeline, and hadn’t been much interested in it before then. Neither were many of the people in the room around me. But there was something about the AGIA plan—say nothing of Sarah Palin’s administration—that brought us all out. Everyone wants to be part of something, and we were invited to be part of this.
It was a movement, built around sovereignty and self-determination. It was business, but it was wrapped in cause and purpose and ideology. It was something for the history books. It was so much more than a gasline. Just like Sarah Palin was, for a brief moment, so much more than just a governor.
I’m a sucker for symbols and for movements. So, apparently, are many in this state.
But for all the reasons it, and she, were exciting, it, and she were also failures. If there’s one thing that history has taught us it is that business and ideology don’t mix. People chalk up AGIA’s failure to the explosion of shale gas in the Lower 48. And there’s some truth to that. But you can also trace it back to the philosophy underlying it. The producers, among the largest energy companies in the world, the ones that have the lease rights to the gas, were not going to be put in a corner and they weren’t going to have the terms of the project dictated to them without a huge, messy, expensive fight that, had we continued, would have lasted decades.
We don’t have more decades. The oil is running out. The producers, on the other hand, have lots of oil, and lots of other gas in places all over the world. They can wait it out. We can’t. It’s painful to say, but those are simply the facts. We can continue to fight and deny it. We can continue to waste all of our time and energy throwing slogans at it, and watch as the days turn months and turn into years. Or we can make smart, prudent business decisions that work for all parties. And then, we can get on to building a lasting, self-sustaining economy.
After Palin quit, Gov. Sean Parnell, as he’s wont to do, trod lightly. After it was clear that AGIA was going to fail, he allowed his people to quietly assemble another plan, one that would include some aspects of AGIA, and some of the projects before it. For better, and for worse, this was all done without big public meetings, and without big fanfare. This new pipeline plan doesn’t even have a catchy name.
It might not be perfect, and it might not be all that we want, but the pipeline is now closer to being built than it ever has been. Combined, the state and TransCanada have a 25 percent interest in the project. The producers have an interest, and the Legislature—one of the more difficult pieces of the puzzle– is on board. Nothing, particularly this project, is for certain, but for the first time in history, all the pieces are there.
I like Bill Walker. I like his message. I like his crowd. They’re much more my tribe than Parnell’s crowd. I like the excitement he generates. I like all of it in the same way that I liked Sarah Palin. In fact, I like it better than Sarah Palin. I like the movement.
But I also like a strong, stable economy. I like the progress I see in the gasline.
For more than 30 years, Walker has been working on gasline issues, and pushing a plan for state ownership of the line. He’s been thwarted along the way, and he’s angry about it. He’s tempered his message and his anger now, but as recently as 2011, he was calling for the state to finance and build the line itself. Now, he’s saying that he wants Alaskans to be the majority owners in a project that is expected to cost as much as $65 billion.
Walker’s saying that his plan does not entail a wholesale re-write of the contract. While I respect him, he’s either being naive or simply not being straight here. The 25 percent state interest is one of the key components of the current contract. A greater ownership means that all the parties are back at the table, and it means that it has to, once again, pass through the Legislature.
And this time, he’ll be facing a Legislature that is not apt to be sympathetic to him or to his plan. He’ll get some Democrats on his side, but he’s going to face a hostile Republican majority. And unlike Sarah Palin, he doesn’t have a huge wave of public support, nor will he have a huge federal corruption scandal to build on that support.
Even according to the most optimistic predictions based primarily on hope, the whole process will take years.
It might be worth it. Walker can be persuasive when he talks about taking back the state and about controlling our destiny.
But we should all be aware of the risks: And the risks in this case are that what we have now will all be undone.
Sarah Palin was persuasive too. On that day in 2007, she popped in the library where we were all so excited, all so sure that it was going to work. We were all so sure until years went by, oil production continued to decline, the state’s position continued to deteriorate, and in the end, it failed.
Contact Amanda Coyne at email@example.com