What Gov. Bill Walker and Lt. Gov. Byron Mallott do in the next few weeks can impact a future export gas line more than what they do for the remainder of their administration. Here are key elements for the new administration to consider.
Alaskas competitive advantages in exporting natural gas
Consider Alaska versus Russia, Iran, Algeria, Qatar, Papua New Guinea and a long list of countries offering competing oil and natural gas? We are a higher cost producer of natural gas, but unlike most of our competitors, we have good government and the rule of law.
Alaska offers protection for investors in mega-projects as well as small independent producers. With the passing of each day this becomes more valuable throughout the oil and gas exporting world. We can assure prospective gas buyers, Japan, Korea, and China, that they can rely on our future supply contracts being fulfilled.
Since good government and our strong legal system must counterbalance not being a low-cost producer, we need to focus on what we can do to bolster those strengths.
Send the good governance message now
Stability equates to good government in Alaska. Former Gov. Parnell and the Legislature's years of workmanlike, steady progress throughout the energy sector have created a valuable asset, which in the next several weeks can be either squandered or built upon by the new administration. If the energy industry sees a commitment to continue along the same path, it will be reassured and Alaska's reputation for stability enhanced. If too many new executive agency appointments are made or new policies enunciated, we will quickly lose the benefit of six years of good governance by Parnell and the Legislature.
Walker has already picked new commissioners for many important departments including those that manage state oil and gas affairs. The most concrete way to project stability is not to replace deputy commissioners in the departments dealing with the energy sector, e.g. the departments of natural resources, environmental conservation, revenue, administration, law and labor. The new commissioners will eventually want to choose their own key deputies, but delaying the replacement of deputy and assistant commissioners will set the tone of a stable government.
Equally important will be retaining directors of the divisions in those departments that deal with the energy sector. Keeping the directors in place will assure that the pace of business is not disturbed; that day-to-day advances in the engineering and permitting of a LNG plant and the export gas line are not delayed during a transition. The directors and their deputy directors are who the executives in the industry work with day to day.
Key divisions in the DNR are advancing natural gas projects -- the divisions of oil and gas, of geophysical and geological services, and of mining, land and water and the office of project management and permitting. In DEC, key movers are the divisions of water, spill prevention, and air quality. In the Revenue Department, the tax division is important. In the attorney general's office the section chiefs of DNR and the oil, gas and mining sections are significant in the state's involvement.
In advisory commissions and agencies dealing with the short and long gas pipelines, such as the Alaska Oil and Gas Conservation Commission, and the Royalty Oil and Gas Development Authority, the executive directors and their deputies should also be retained, or replaced slowly.
It will cost the new administration nothing to prove stability. Keeping the government's executives in place will save money by eliminating unproductive time spent in transition.
Rule of law
Reliability should be shown by the new administration committing not to tamper with the judicial system. The fairness and trust in our legal system is what distinguishes us from our competitors, even some of our competing states like Louisiana and Texas. The heated issues of whether to elect or appoint judges, or to reform the Alaska Judicial Council, should be allowed to wither away without the administration's interference.
Conclusion
The competitive advantage of stability becomes greater with every passing day: Our competitor, North Dakota, is now having major growing pains and legal issues with oil transport by rail and fracking.
Defeat of the repeal of SB 21 in August's primary election strengthened Alaska's dependability image. Now it's up to our new team to protect and enhance it, by doing what comes least naturally in politics -- slowing change.
Miles Schlosberg is a longtime Alaska businessman and property developer.
The views expressed here are the writer's own and are not necessarily endorsed by Alaska Dispatch News, which welcomes a broad range of viewpoints. To submit a piece for consideration, e-mail commentary(at)alaskadispatch.com