The leading candidates for governor tangoed over a host of Alaska issues in their first forum on Monday, with Republican Gov. Sean Parnell and independent candidate Bill Walker locking horns over oil taxes and the gas line megaproject, and Democrat Byron Mallott calling for better education and communication.
Parnell, not usually abrasive, quickly got personal at the lunch meeting organized by the Anchorage Chamber of Commerce, blasting Walker, an oil and gas attorney, over the state's long-sought natural gas line. Parnell's administration is in the early stages of advancing a liquefied natural gas project that one day could have the state owning part of the project with BP, ConocoPhillips, Exxon Mobil and pipeline builder TransCanada. In 2008, TransCanada won an exclusive license under the Alaska Gasline Inducement Act to pursue the construction of a gas line from the North Slope into Canada and the Lower 48, with a promise of up to $500 million in reimbursable costs from the state. In the face of changing markets, that effort has been abandoned after the state paid more than $300 million in subsidies. Now, TransCanada is working with the oil companies, without the subsidy, to study the gas liquefaction and export project.
Walker turned to history to make his point. He pulled out a stack of binders he'd brought with him that he said contained 400 old announcements of gas line projects that failed since 1978. Referring to the governor's new effort, Walker said the state is ceding too much control to the companies, and that Alaskans need to be in charge.
"We sit back and we put the control in companies' hands that have competing projects elsewhere," he said, suggesting that Alaska's project may not be a priority.
"And what in the world is TransCanada still involved in this for? I thought they should have been sent home a long time ago," he added, drawing applause and some whoops.
Parnell shot back: "There's only one candidate at this table who has actually been working to build a gas line. The other one who was just up here has been speaking about it for 30, 40 years, but has not shown results for it."
'We can ... control our destiny'
TransCanada is part of the deal because they know how to build a pipeline, and the state is not in that business, Parnell said. As for the state, it's getting its gas in the deal in tax and royalty. "We get to own and control our part of this deal so we can own and control our destiny," Parnell said.
"Our independent financial analysis that was done convinced legislators on the left -- people like Les Gara -- and on the right -- people like John Coghill -- that this is the best way forward," he said, generating some applause.
Walker returned fire when the moderator, chamber President Andrew Halcro, asked the candidates what chance they'd give the current megaproject of being built.
Walker patted the binders next to him and said, "The same chance I give these 400 announcements, zero," he said.
He said he'd attempted to bring Asian groups interested in buying Alaska gas, including Kogas (Korea Gas Corporation), the world's largest buyer of liquefied natural gas, to the governor's office to meet Parnell. After the Fukushima disaster in Japan three years ago, the governor wasn't available to meet, he said. The buyers went on to get their gas elsewhere.
"To say I've just been talking about it -- I have been talking about," Walker said forcefully, "in London and all over the world, bringing the market here three times. That's what we need to do, bring the market (to Alaska) and stop studying stuff."
Parnell said he gave the project a 100 percent chance and replied: "I, too, have been in the boardrooms of Kogas, Tokyo Gas," he said. "What I heard was you got to have gas with you, not just your royalty gas, we need more gas. Under the guidance documents that we've signed and have been approved by the Legislature, we are now, with the producers, required to go market gas together to Asia.
"That is the first time in history that that has occurred, that is the difference. That is why I'm optimistic we'll continue moving forward to get Alaskans' gas to market."
Mallott: Invest in education
Byron Mallott said the companies involved in the project are "leaning into the wind" to push the project ahead, suggesting it has a chance of happening. "I would say 50 percent now, 100 percent when I'm elected governor," he said to laughter.
The forum, in front of some 170 people, was the first of what are expected to be at least eight events involving the three men before the November election. Halcro said the chamber plans to hold a more traditional governor's debate -- rather than a forum that hinders direct rebuttals -- after the August primary.
The forum gave candidates a chance to distinguish themselves. Mallott, saying he's married to a lifelong teacher, emphasized the need for more investment in education, including early childhood education, that allows schools time to plan and prepare for the next year.
"It is not an education session of the Alaska Legislature when you pass an education funding bill in the 94th or 95th day of a 90 day session," he said, referring to the most recent meeting of legislators in Juneau, which Parnell had dubbed "the education session."
Mallott and Walker said they would expand Medicaid. Parnell has refused to do so.
The three also had different views on what might be the biggest challenge facing Alaska's economy.
Parnell said it's the possible repeal of Senate Bill 21. "If we turn back the clock on billions in new investment, if we say no to all the jobs on the North Slope right now and if we say yes to guaranteed production decline again, we have sealed our own fate as Alaskans," he said, adding that a healthy oil industry is needed to build the gas line, too. His job on the economic front is creating paths and opportunity, he said.
Walker said it's the massive deficit. Before the forum began, he handed out a grim 10-year forecast released by the state Office of Management and Budget showing deficit spending every year.
"We are the only state that has a 10-year forecasted deficit," he said. "It's just a matter of when do we run out of that money. Do we run out of our savings in eight years or nine years?"
Walker said a gas line needs to be built, and the state needs a governor who will encourage more competition on the North Slope to get more oil in the pipeline. Most of the production comes from BP, Exxon and ConocoPhillips, though nine companies are currently producing oil on the slope. Walker said there should be about 50 or 60 companies.
Mallott said a gas line is needed. But more than anything, all Alaskans must be heard in decisions that affect their lives. "From Anchorage to Anaktuvak Pass, from Ketchikan to Kaktovik, Alaskans must be engaged, their voices must be heard, and when that happens, together, we will change the face of this great state."
Deer and caterpillars
All the candidates said federal overreach is real, and they cited examples, including the decision in December by Interior Secretary Sally Jewell not to allow a 12-mile road through the Izembek National Wildlife Refuge to help the isolated village of King Cove access emergency flights using the runway in nearby Cold Bay.
Walker reminded the audience that Jewell had said she would listen to the animals. Walker said he would listen to the animals, too. The deer and caterpillar are his favorite, as in John Deere and Caterpillar, both heavy equipment manufacturers.
"Those are the animals I'll listen to," Walker said. "I'll build the road. You might want to pay attention to my lieutenant governor because I'll be in quite a bit of trouble with the federal government because I'm not going to back up. I'm tired of backing up," he said, adding that the state has every right to protect the health and safety of its residents.