JUNEAU -- The Senate on Tuesday approved a bill allowing Outsiders to serve on the board overseeing the development of Alaska's gas line and backdated it to September to legalize the governor's appointment of a former Exxon official from Texas.
Republicans stood in debate to argue that Gov. Sean Parnell should be allowed to pick the best person possible. Democrats countered that the board can hire consulting experts from anywhere in the world, but Alaskans know plenty about oil and gas and they should be the ones who set board policy.
The bill passed 13-7, with some senators crossing party and caucus lines. One member of the Democratic minority, Sen. Lyman Hoffman of Bethel, was among the 13 in favor of the bill. Three members of the majority caucus voted against the bill: Democratic Sens. Dennis Egan of Juneau and Donald Olson of Golovin, and Republican Sen. Bert Stedman of Sitka.
The backdating to September led the minority leader, Sen. Hollis French, D-Anchorage, to voice a rare objection to approving the bill's effective date, a decision usually made without a separate floor vote. His objection forced a recorded vote and a 16-4 decision, with only him and the three other Anchorage Democrats in opposition.
The bill originated with the House leadership as House Bill 383. It was carried to the Senate floor by Sen. Cathy Giessel, R-Anchorage, who opened debate by saying the Legislature always intended that an Outsider could be appointed to any of the five public board seats of the Alaska Gasline Development Corp. A law dating back to territorial days, requiring any appointee to a board or commission to be a registered Alaska voter, should not apply to the AGDC board, she said.
The state-chartered corporation was created in 2013 to build a small-diameter gas line from the North Slope to Southcentral Alaska. But AGDC would assume a far greater role if this year's gas line legislation is approved: it would be the agency that represents the state before the big three producers and pipeline company TransCanada in construction and operation of the proposed big line from the North Slope to Nikiski.
Parnell appointed the five citizen members to board in September. Four were Alaskans, but the fifth was Dick Rabinow from Houston, a former ExxonMobil pipeline official. All five would have to be confirmed by the Legislature this session.
Rabinow's appointment hardly raised a stir until Parnell tried to appoint two former oil company officials to the board that sets the tax value of the trans-Alaska pipeline. One was from California. His appointment became so controversial that he withdrew his application. Rabinow, however, has not.
Giessel said the new gas line would be a $65 billion mega-project that will need tight management to stay within budget. The state needs people "with expertise and experience in construction management, marketing of natural gas, all of those elements."
She said the new bill "corrects an ambiguity" in board membership qualifications in last year's law, House Bill 4.
"Let me make it very clear -- the intent in HB 4 would be to allow for non-residents, which provides the governor with the greatest possible latitude in appointing candidates," Giessel said. The issue is about "empowering the governor to bring the greatest possible expertise to this massive undertaking, giving the long-held dreams of Alaskans every advantage to be recognized with a well-managed project."
That's not the case at all, countered French.
"This bill is an admission of guilt that the governor broke the law in appointing a non-Alaskan to the board," French said.
"There are some areas where Alaskans are not expert, but the oil industry is not that area," French added. "What part of this gas pipeline is too complicated for Alaskans to figure out?"
"This idea that we can't find one more Alaskan to serve on this board, I just don't buy it," said Sen. Bill Wielechowski, D-Anchorage. "Do we really think that putting out-of-state residents, out-of-state oil executives on this board, that they're going to fight for low-cost gas for Alaskans?"
Supporting the bill, Sen. Gary Stevens, R-Kodiak, said he's served on boards with non-residents "who have done tremendous service for Alaska."
"It's a little bit of a provincial attitude to say that we should not be appointing Outsiders," Stevens said.
Sen. Peter Micciche, R-Soldotna, said the state could be at a disadvantage if it only drew from Alaska.
"We want to have the expertise here to compete, head to head, with some of the largest corporations in the world," Micciche said. "Can you imagine if those corporations drew a geographic box around where they're going to pick the folks for their board of directors? I don't believe we should either."
Sen. Donald Olson, D-Golovin, said there's a good reason for having Alaskans on boards.
"We make decisions, we have to live with the consequences, right or wrong, because we are residents of the state of Alaska," Olson said.
Reach Richard Mauer at email@example.com or (907) 500-7388.
By RICHARD MAUER