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ALERT – ALERT – ALERT NOTICE THIS AFTERNOON. BOEM releases draft Environmental Impact Statement for Potential Cook Inlet Lease Sale: Agency Seeks Public Comments through Sept. 6
Potential Gasline Ethics Warning
In late 2015 we warned Legislators to get rid of any gas line public funding for many reasons, including a litany of conflicts of interest likely to emerge. (Read below, column right)
Commentary: Alaska’s Quixotic gasline governor is intent on risking hundreds of millions of public, EQUITY dollars on a gas pipeline/LNG project — even without the company of Alaska’s major producer/investors — which adds to Alaska’s multi-billion dollar budget deficit.
The project itself could be economically feasible someday, but probably not in the foreseeable future. At least in this low LNG price environment, it is foolhardy to keep pouring public money into a project without interim, front-end engineering and design evidence of feasibility and enthusiastic support of Alaska’s producing companies. And they, in turn, have no constitutional guarantee of fiscal certainty that applies to a potential gas project at the least, and preferably applies as well to oil operations. (Once you stick a $40-60 billion gas pipe into the permafrost you shouldn’t have to wonder if local politicians will introduce some bill to create or increase taxes that completely change the metrics of your investment decision. i.e. “I wish we’d never invested in THAT?”)
In any case, the expertise in determining feasibility lies in the experienced offices of energy companies that know how to manage risk. The irony is that even if a government-sponsored project can be in operation by 2023 – 25, any income it might produce — at Alaska’s current rate of unsustainable spending — will arrive after Alaska has either, 1) bankrupted itself or, 2) burned through a good portion of its Constitutionally protected Permanent Fund.
Alaskans can at least be grateful that a capable businessman like Dave Cruz is in a position to minimize questionable uses of public funds (i.e. In the new Houston office, let’s hire my daughter and put “…a bear skin rug, an Alaska flag in the entryway and other Alaska stuff….” )
Actually, Alaska shouldn’t have a government owned and run gas marketing office in Houston or anywhere else anyway. The whole Alaska Gasline Development Corporation (AGDC) is a government operation authorized and run by a bizarre bureaucracy of TEMPORARY elected, appointed and contracted people — all of whom are subject to the same sort of human temptations that brought a brand new CEO to even consider introducing nepotism into a Lower 48 government office — especially when his sponsoring government is going broke and citizens are watching every move government makes these days.
Please, let’s don’t put marketing of Alaska North Slope gas into the hands of a temporary government bureaucracy when on the same side of the street are the most experienced oil and gas marketers in the world — ready, willing and able to do what they do best, when the time is right.
You say, “Well, they might take advantage of us.” We say, “Shame on us if we don’t know or are incapable of learning, ‘The Art Of The Deal’.”
P.S. We would be remiss in not acknowledging the wonderful opportunity a Houston gas marketing office provides for all manner of public officials to travel there at state expense to ‘inspect’ the office and be ‘briefed’ on gas marketing activity. -dh) (Read Alex DeMarban’s ADN piece below, column left)
State gas line agency to open Houston office, but top executive can’t hire his daughter
See November 5, 2015 “Unintended Consequences” warning column right
- Author:
The new president of the state’s gas line corporation said Thursday he plans to open a marketing office in Houston with a “real Alaska feel” and would like to hire his oldest daughter as one of his employees to work there.
Keith Meyer, 58, said his daughter, whom he would not name….
She is not paid a lot, is “a very good hand, and would be an excellent addition” to Alaska Gasline Development Corp., he said.
But Dave Cruz, chair of the AGDC board, said there won’t be family hiring within the state agency. …
Cruz said the board, which hired Meyer in June, will otherwise be closely involved in the hiring process associated with the Houston office.
“We’ll make sure we’re not exposing the state or corporation to any violation of nepotism regulations,” said Cruz. “We’ll make sure it’s done right, and …. (Find full ADN story here.)
Harbour warns legislature of unintended consequences of gasline government ownership
Unintended consequences (See full 11-5-15 commentary here). All of our respected elected and appointed officials mean well, “intending to represent the good people of the state of Alaska”. However, while we cannot imagine or fully describe all possible unintended consequences of government attempting to control both its obvious and subjective interest in a free enterprise project, we have already articulated a number of traps and snares in earlier Northern Gas Pipelines commentary. All of these, and more, could require a significant amount of elected official time. As a refresher, here are a few of those possible traps and snares:
- Existing and future governors and legislators seeking to pressure the three private consortium members into accepting project expenses that do not benefit their shareholders. This dangerous possibility is created when one’s peer, one’s “aligned” partner is also one’s regulator, one’s royalty landlord and one’s tax master.
- Elected officials “recommending” that AGDC talk with certain contractors about their capabilities–thus indirectly undermining AGDC contracting policies.
- Alaska elected/appointed officials in Juneau or Washington D.C. “recommending” employees/executives for AGDC consideration, thus attempting to influence employment practices that may corrupt established, fair hiring practices.
- Should AGDC be prohibited from hiring family and recommended friends of elected officials as a way to protect against the application of undue or even subtle influence? Members of the legislature work for private Ak-LNG affiliates; should legislators be permitted to work as employees or contractors for Ak-LNG, a public agency whose budgets and policies they control?
- Should the legislature, in this unique circumstance, create a “wall of ethical separation” between state officials and Ak-LNG’s AGDC and private participants?
- Should AGDC, as Anchorage’s ML&P has done in the past, purchase expensive “tables” or “tickets” at public events and invite elected/appointed officials to join executives at the event?
- Under what conditions should AGDC employees/spouses/families be given special treatment at public expense as private companies do at private expense (i.e. Christmas parties, birthday parties, retirement parties, summer BBQs, undocumented compensatory time, company vehicles, etc.? Can AGDC operate as a ‘business’ member of Ak-LNG under traditional state human resources policies? Should it? Do citizens want AGDC to become a “sponsor” of various community non-profit or government events, at public expense? Should AGDC use public funds to support member or board involvement in various community non-profits?)
- Should AGDC, acting as a ‘business’, develop community relations, stakeholder and public relations programs that result in the transfer of public money to private beneficiaries (i.e. travel, food, entertainment, scholarship programs, gifts, logo items, etc.).
- Should public meeting laws apply to AGDC ‘business meetings and practices’?
- Should decision makers review the application of freedom of information requests to AGDC’s public and confidential communications, especially when they could negatively affect private members of Ak-LNG?
- And, on, and on, and on….
Conclusion. We believe that for all these and many other compelling reasons, Alaska’s elected officials should consider taking the following steps …. (Find complete 11-5-15 commentary here)
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