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Alaska Democrats call for unbiased oil and gas consultants

Gov. Sean Parnell presents his budget at an Anchorage Chamber of Commerce event on Dec. 12, 2013. Democratic legislators say they're concerned the administration is spending state funds to pay for consultants who present a one-sided view of the governor's gas line plans. Loren Holmes photo

JUNEAU -- While Alaska may have yet to build a natural gas pipeline, it's developed a booming business in oil and gas consultants to advise state officials on the long-awaited gas line.

But despite the amount being spent on oil and gas consultants, some Democrats are worried about the objectivity of the consultants -- and the objectivity of the advice that they're being paid to give with public money.

That's an issue that Rep. Les Gara, D-Anchorage, said he raised personally with Gov. Sean Parnell.

"'Will you please hire some consultants that both sides can trust so we don't feel we're just getting spin from people who want to push your proposal?'" he said he asked. "So far, we have not seen that."

That's an issue that came up last year during the debate over Senate Bill 21, overturning the ACES oil tax law. The Parnell administration kept Gaffney, Cline & Associates, which helped write the law, under contract but rejected requests for the company's consultants to testify before the Legislature.

The Parnell administration has its own consulting firm it is using for the oil tax issue, Econ One Research, which it has used extensively and has paid hundreds of thousands of dollars a year in recent years.

Gara said Gaffney Cline was "gagged" to prevent it from undermining the administration's claims.

This session the Parnell administration is pushing a natural gas pipeline proposal, abandoning the previous independent pipeline and contracting with the state's gas leaseholders to develop a pipeline.

Sen. Anna Fairclough, R-Anchorage, said the Legislature has its own consultants on staff to provide trustworthy advice that legislators can rely on, independent of the administration. Fairclough chairs the Legislature's Budget and Audit Committee, which provides the funds to hire legislative consultants.

The legislative consultants, from a firm called PFC Energy in recent years, but who this year are former PFC employees Janak Mayer and Nikos Tsafos, were originally hired by the Senate Working Group, the bipartisan coalition that controlled the Senate for six years. While led by Republicans, it had a majority of the Senate's Democratic members.

"These are the same consultants as we had under the bipartisan coalition," said Sen. Kevin Meyer, R-Anchorage, co-chair of the Senate Finance Committee.

That was a important part of the decision to keep Meyer and Tsafos, Fairclough said.

"The reason that we actually retained the current crew and brought them back is that they were hired by the bipartisan working group and had the trust of both sides, the Senate and the House," Fairclough said.

Fairclough said she had not received a request for additional consultants, but Senate Minority Leader Hollis French, D-Anchorage, said Wednesday that he and House Minority Leader Chris Tuck, D-Anchorage, planned to ask for an additional consultant.

In the past, relatively small amounts of money have been allocated for minority consultants.

The administration's and the Legislature's main consultants can get big bucks.

State records show Econ One Research in fiscal year 2013 was paid $573,000 for its work, with $247,000 being paid through Dec. 31 of the the current fiscal year.

The administration's lead consultant will be Black and Veatch, which was paid $354,000 during the last fiscal year by the Department of Natural Resources.

PFC Energy received $620,000 in fiscal year 2012, $385,000 in fiscal year 2013 and $283,000 for the first half of fiscal year 2014, before Mayer and Tsafos went out on their own, according to the Legislative Budget and Audit Committee.  

Now, the two legislative consultants each get paid $250,000 for five months during the session, as well costs for housing, cars and other expenses while in Juneau.

Sen. Bill Wielechowski, D-Anchorage, said independent expert consultants proved useful to the state when former. Gov. Frank Murkowski made a gas line proposal that the Legislature refused to approve.

One of the consultants, Pedro van Meurs, urged adoption of the Stranded Gas Act pipeline proposal.

Later, an internal memo was revealed in which he cautioned Murkowski Alaska was giving away too much in order to get a natural gas pipeline.

"There is no reason to treat Alaska like a banana republic in order to secure a gas line," Wielechowski quoted van Meurs as warning.

Rep. David Guttenberg, D-Fairbanks, said Alaska needs to hear from more diverse voices among consultants.

"When they all say the same thing, something is wrong," Guttenberg said.

Department of Revenue Deputy Commissioner Mike Pawlowski said he was not yet sure whether Gaffney Cline other other consultants would testify.

"We will work with the committees to see who they would like testimony from," Pawlowski said.

In the Republican-controlled Legislature, all those committees are likely to be chaired by Republicans.

Contact Pat Forgey at pat(at)alaskadispatch.com.