GOP Parasite TransCanada Finally Shed

The divorce between Alaska and TransCanada became final this week. The Legislature voted to buy TransCanada’s share of a prospective natural gas pipeline from the North Slope. How the state ended up in that shotgun marriage is a lesson in corporate power and Republican legislators’ willingness to kowtow to it.

Our story begins with Gov. Sarah Palin’s attempt to encourage a natural gas pipeline. It wasn’t a terrible idea to try to get an independent pipeline company directly involved in the project. When the Legislature passed the Alaska Natural Gasline Inducement Act in 2007, the idea was to incentivize a gas pipeline to the Lower 48, where the Henry Hub price of natural gas was on its way to $12 per thousand cubic feet.

Ship 6 billion cubic feet of gas for $5 per thousand cubic feet and sell it for $12. What could go wrong with that? Well, hydraulic fracturing, which sent gas prices plummeting — to below $2 per thousand cubic feet — in a few years, making the project deeply uneconomic.

Gov. Sean Parnell had a different idea for jump-starting a gas pipeline. We would “partner” with BP, ConocoPhillips and Exxon Mobil, which is Parnell-speak for giving the companies the keys to the state treasury and telling them to do whatever they think is best.

To get the “partnership” with the oil companies, Parnell had to get out of the AGIA deal with TransCanada. Not hard, really, since there was a clause in AGIA that said if the project became uneconomic, the state’s relationship with TransCanada would end. But Parnell decided that, rather than simply declare the TransCanada deal uneconomic, the state should keep TransCanada involved through a sweetheart deal. Because why act like a sovereign when you can pay a big multinational company hundreds of millions in public money?

Parnell had his commissioner of the Department of Natural Resources, Joe Balash, and Deputy Commissioner of Revenue Mike Pawlowski cook up a deal with TransCanada. Basically, TransCanada got to continue its Alaska gravy train.

TransCanada would not build the pipeline, but instead would act like a very expensive bank for the state. The state would bear all the risks of a pipeline project, while TransCanada would get the benefits. Alaska would pay TransCanada an additional 7 percent for the privilege.

If TransCanada decided at any time it didn’t want to build the pipeline, Alaska paid, plus 7 percent. Cost overruns? Alaska paid, plus 7 percent. And TransCanada, rather than the state, got to vote when the principals met to decide what to do. It was literally one of the worst deals in Alaska history, a history rife with corporate giveaways.

So how did such a bad deal get approved by the Legislature? The Republican majority’s own expert called it “a sole-source contract worth tens of billions of dollars to transport the state’s gas” that “transfers all of the risk of a failed project to the state.” He strongly suggested that rather than agree to the deal with TransCanada, the state go out for competitive bid.

But his report was buried for months until March 14, 2014, when Alaska Dispatch News reporter Dermot Cole discovered it — just four days before the Senate was set to vote on the deal. After the report surfaced, Senate Democrats asked for a hearing on it. Republican leaders said no.

Democrats tried to amend the deal to strip out TransCanada. Republicans refused. “Pro-development” groups like the Alaska Chamber of Commerce and the Resource Development Council weighed in to support the deal (because they always do). The bill passed the Senate with overwhelming Republican support.

The fight then shifted to the House, where Democrats again tried to strip out the bad TransCanada provisions. Again they were out-voted by the Republican majority.

So fast-forward to now. Legislators returning to Juneau for a special session were baffled — just baffled — by the terrible deal with TransCanada. But rather than hold hearings that would have examined the history and exposed their own incompetence and complicity, they tried changing the subject and attacking Gov. Bill Walker over such things as an organizational chart.

Nevertheless, this time the right course was so obvious even the Republicans couldn’t avoid it. Our divorce with TransCanada was overwhelmingly approved. The state is better for it, although it only happened after we squandered millions of public dollars paying TransCanada.

As for Balash and Pawlowski, the Parnell aides who authored the TransCanada deal, Balash is now chief of staff for Republican U.S. Sen. Dan Sullivan, and Pawlowski is deputy chief of staff for U.S. Sen. Lisa Murkowski.

Rest easy, corporate raiders of the public purse and your stooges, there will be no accountability for your abuse of the public trust. That’s the Alaskan way.

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