We Pray This Report Is Only A Reporter’s Nightmare, Lest It Become Reality

Commentary by Dave Harbour
So far, we lack confirmation of the adjacent story and hope it is only a terrifying rumor.

Former Alaska Governor Bill Walker. NGP File Photo by Dave Harbour

But if the former Governor or any other private citizen is successful in convincing enough decision-makers to support this type of deal, we believe it will be at the expense of every Alaskan in several ways.  We believe the state could be in the position of gifting the assets of the project to an entity that would not necessarily build the project.  Rather, the entity shareholder(s) could be in a position to act as an agent to sell Alaska citizens’ project assets or otherwise reap unearned, undeserved wealth.

We imagine the argument for having a private party like Bill Walker (or me and my friends) to assume control of the project and its assets could go something like this
  • The world is awash in gas right now, but I can build on my contacts to breathe life back into prospects for an All-Alaska gas export project that provides jobs and energy to Alaskans.
  • The project has gone as far as a state-run project can and needs an injection of private entrepreneurship.
  • My organization of LNG experts, former project employees and Alaskan investors will absorb future expenses while keeping this wealth and job-producing project alive.
  • It would be a shame to waste the millions the state has invested to date in obtaining both federal approvals and the monumental technical investment and accomplishment.

We respectfully urge state lawmakers to not repeat mistakes of the past.  Decades ago Anchorage politicians failed to sell its telephone utility for the highest possible price.  More recently, Anchorage politicians negotiated a “sole-source” sale of its downtown, municipal-owned electric utility.  To do so it convinced citizens to override a municipal charter requirement for supermajority approval and approved the sale of the electric utility to the large coop, Chugach Electric Association (CEA).  The state has also allowed Fairbanks politicians to receive regulatory approval and subsidies necessary to purchase a fledgling LNG-sourced gas utility and expand it even though long term gas supplies were not achieved.  All of these projects and many during the 1980s were approved by political trading, not by free market-based justifications.

So what is our suggestion for those interested in maximizing wealth to Alaska resulting from its decades of subsidizing current and former Alaska gas transportation projects?

Our solution for the economically infeasible Alaska Gasline Development Corporation (AGDC) is nothing extreme.  We merely recommend that the government quit pouring subsidies into the pseudo corporation and professionally divest itself of what is inherently a private enterprise project.

We recommend that this be done in a way designed to maximize wealth to the state and its citizens, not to private, third parties or politicians.  The government would hire professional archivists to work with current AGDC staff to organize all of the public corporation’s assets with an eye on selling those assets in a public and transparent way that serves the public interest.  This could be done via requests for proposal, requests for bids on all or a portion of AGDC assets, or at a publically advertised auction of all or a portion of the assets.

The sale under any scenario would have requirements protecting both the public interest and national interests.  The sale/transfer of assets would be to principals only and the assets would be returned to the state if the principal party attempted to act as an agent or contractor to other principal parties. No former or current public officials of the state of Alaska could be investors or shareholders in any resulting project absent legislative approval.  Only domestic U.S. or Canadian energy companies could be primary and-or majority owners of the project.  No communist country or other OPEC companies, organizations or entities of any kind could invest in or own or acquire any AGDC assets currently or in the future. No communist country companies alone or as a group would be permitted to contract for over 10 percent of pipeline throughput in order to prevent overdependence on entities that might not prize free enterprise over territorial adventurism.

We would bet that Alaskan attorneys could construct sufficient protections to serve both the public interest and the financial interests of the State of Alaska.

That said, we implore the state to not consider any offer to acquire AGDC assets that Bill Walker or another person might submit to state officials.  Instead, if a competitive and economically feasible Alaska North Slope gas export project is to proceed, let it proceed in the professional hands of a reputable, abundantly financed, North American energy company with actual gas pipeline construction and operating experience.

Firm led by former Alaska governor seeks to take over LNG project

NOVEMBER 11, 2020,  8:44 AM