Sunday, October 26, 2008

Socialism in Alaska

If Republicans can call Obama's progressive tax plan socialism, than I see no problem with calling the payments Alaskans receive from oil royalties socialism.

So too did the depletion of Alaska's long-reliable reserves of oil, which are trapped in the same Arctic Circle reservoirs as clean-burning natural gas. Not only does that oil provide jobs, it pays for an annual dividend check to nearly every Alaska resident. This year's payment was $2,069, 25 percent higher than 2007 - plus a $1,200 bonus rebate to help offset higher energy costs.

Palin was elected as governor two years ago in part because of her populist appeal. Promising "New Energy for Alaska," she vowed to take on Exxon Mobil Corp., ConocoPhillips and BP, the multinational energy companies that long dominated the state's biggest industry.

Oil interests were particularly unpopular at that moment: Federal agents had recently raided the offices of six lawmakers in a Justice Department investigation into whether an Alaska oil services company paid bribes in exchange for promoting a new taxing formula that would ultimately further the multinationals' pipeline plans.

I'll not begrudge Alaskans their dividends. Mississippi will soon benefit from royalties on gas leases in the Gulf of Mexico. Palin and her pipeline goals for Alaska have other issues. There appears to be something very fishy how TransCanada won out over other companies who submitted bids to build a pipeline through Alaska and Canada.

As governor of Alaska, Palin ignored the recommendation that elected officials should avoid contact with those bidding on the pipeline.

-Instead of creating a process that would attract many potential builders, Palin slanted the terms away from an important group - the global energy giants that own the rights to the gas.

-Despite promises and legal guidance not to talk directly with potential bidders, Palin had meetings or phone calls with nearly every major candidate, including TransCanada.

-The leader of Palin's pipeline team had been a partner at a lobbying firm where she worked on behalf of a TransCanada subsidiary. Also, that woman's former business partner at the lobbying firm was TransCanada's lead private lobbyist on the pipeline deal, interacting with legislators in the weeks before the vote to grant TransCanada the contract. Plus, a former TransCanada executive served as an outside consultant to Palin's pipeline team.

-Under a different set of rules four years earlier, TransCanada had offered to build the pipeline without a state subsidy; under Palin, the company could receive a maximum $500 million.

There are more problems with this deal. The article is a lengthy one. It does give one an idea about Palin acted as governor. She disregarded her state legislature. The pipeline, if it is ever built, will cost taxpayers $500 million more through a subsidy that TransCanada did not ask for 4 years ago.

If this is the only thing Palin has to brag about while governor, it doesn't seem to be a sterling example of good executive practice and if the pipeline is ever built(Canadians don't appear to be fond of it), it will end up costing all taxpayers. Perhaps if the bidding process hadn't so slanted to begin with, there would not have been the need for the $500 million subsidy.

This deal is touted by Palin as her biggest and most impressive act as governor.

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