Friday, April 17, 2015

Walker Or Chenault? - A Look At the Showdown Players

Dermot Cole's article in the ADN today, outlines the differences between the governor and the Republican leaders in the legislature over gas pipelines.

On the one hand Cole says the legislators see a partnership between the state and the oil companies.
"The ruling Republican majorities envision the state and the oil companies marching forward — more or less in unison — on a shared pipeline vision, capable of working out any disagreements that might derail the gas pipeline partnership."
 The governor, while fine with this partnership with the oil companies, thinks we should have a back up plan in case things don't work out.  

The legislators don't like this approach.
"They portray his plan for a backup export project as a signal to the oil companies that the state is not committed to its agreement."
They think the governor is trying to shake down the oil companies.  
“'You have made clear your desire to have a parallel project to use as leverage against our Alaska LNG partners in order to force changes in existing contractual terms,' House Speaker Mike Chenault and Senate President Kevin Meyer said in a letter April 10."
But the governor thinks the oil companies and the state, while having some overlapping goals, are still two separate entities negotiating a deal.  The oil companies will eventually decide based on their view of their best interests.  The state of Alaska, he thinks, should do the same.   The oil companies have back up plans if they don't like the final pipeline details.  The state too should have such a back up plan.
"Walker counters that it is not a matter of using leverage against the oil company partners, but of using leverage to protect Alaska. He said the oil companies understand this. Partners or not, many of the key details about the pipeline project have yet to be negotiated and Walker says he is only doing what the oil companies do for themselves — preserving options."

How do we assess which of these positions is sounder? 

One route is to look at the players and figure out their abilities and their loyalities. 

Mike Chenault has,  according to his legislative bio, graduated from Kenai Central High School in  1975. It's not clear what work experience he has.  He's listed as a vice-president of a construction company, he has military service, and has been involved with things like the local chamber of commerce.  He's been in the House since 2001, fourteen years.

You can be smart and learn a lot through experience in the world, without a college degree.  And you can get a college degree and still make bad decisions.  But most people agree that a good college education is worth more in most cases, than a high school degree. People put themselves in debt to get one, and businesses are willing to pay more for employees with degrees, and relatively few people at the top don't have college degrees.

A good college education should help broaden students' horizons by exposing them to a wider range of people than they saw in high school and a wider range of ideas and skills.  A truly good education would also help build a person's ability to reason and use logic as well as introducing them to the field of ethics.  Of course, not everyone who has a college degree got all those benefits.  And I can think of some pretty capable people who didn't get college degrees.  Mark Begich for one.  Bill Allen for another.  (And I don't mean that facetiously.  Allen was a high school drop out who through his own smarts and hard work built a company worth hundreds of millions of dollars.  This old post gives my impressions of him during the Kott trial.) 

I don't know a lot about Chenault's life beyond the bio mentioned above.  But he seems to have spent most of his life on the Kenai.  His actions this session reflect a man who's enjoying his power and not  having to defer to others. (He kicked Rep. Reinbold out of the caucus.  He's opposed the governor on medicaid expansion and this pipeline issue.  He's let approval of the governor's appointments languish and when the governor set a special session to vote on the appointments, he basically ignored it.  He got a great subsidy for a fertilizer company in his own district, even though the state is suffering from a huge budget shortfall this year and basic government programs are being cut.  Just a few examples.)  Rather than be a statesman who is respectful of those who see the world differently, he appears disdainful and petty.   He recently sent a nasty letter to Washington State saying neither they, nor any other entities, could treat Alaska like a colony.

My response was to posit whether 'other entities' included oil companies.  Alaska has a history of being treated like a colony and the oil companies are just the latest colonizers.  And his behavior here - that we shouldn't do anything to upset the oil companies, that we shouldn't have a backup plan as we negotiate with them - reflects someone who either has made a pact with the oil industry, or doesn't realize he's become their lackey.  His partner in the letter to Gov. Walker, was Conoco-Phillips employee and Senate president Kevin Meyer.  If we don't know for sure where his loyalties lie, we do know where his regular paycheck comes from.  The fact that Governor Walker defeated Governor Parnell (and Conoco Phillips attorney)  in November thus upsetting the easy pass for oil companies in the governor's office, likely contributes to the legislators' animosity towards Walker.

Walker, on the other hand, has a  BS degree in Business Management from Lewis and Clark College and his JD from the University of Puget Sound School of Law (now Seattle University.)  Practicing law you get to see the inner details of how companies operate. It can be brutal and nasty.  Walker understands that the oil companies' loyalty lies with their shareholders, not with the state of Alaska.

Like a few past Republican governors - Hammond and Hickel come to mind - he's not a patsy for the oil companies.  He understands that the state and oil companies are potential partners in a deal now and then, but in the long term, they have conflicting interests.  The state has an interest in getting the most possible revenue from our natural resources and the oil companies' interest is to do the same.  Some level of cooperation might be beneficial for both parties, but there is a point where each party must look after its own interests separately.

I'd also note that the oil companies spend a fair amount of money helping friendly legislators get elected, and then more for lobbyists to help those legislators figure out how to vote.  We saw how all that worked in 2006 courtesy of FBI tapes that recorded some of those normally out of the spotlight transactions. 

We could think of the legislature is the state's equivalent of a company's board of directors. 

I'm unaware of the state of Alaska paying to get its friends on the boards of directors of any oil companies and then pay for lobbyists to help them make decisions favorable to the state of Alaska.  Furthermore,  when we deal with oil companies, the state's books are public information.  The oil companies' books are mostly closed, even to state negotiators.  It's already a very unbalanced relationship.

I have not looked at the details of the various oil pipeline proposals.  I did, in 2008 hear the arguments for the deal with Trans Canada. But I' haven't stayed informed since then.  So I don't really have a clue which deal is the best.  The money to be invested in the back up plan sounds like a lot, but the numbers involved here are a lot.

I also was there when Byron Mallot talked about Walker's character and decency playing a big role in his becoming his running mate.  I don't see those qualities in Chenault.  He comes across, at least in how the media portray him, as more of a street fighter defending his personal turf. 

That doesn't mean Walker is right.  He's been a long time champion for his pipeline option. 
But all things considered,  it just seems to me that Walker has the interests of the people of Alaska more in mind than do Chenault and Meyer.  His stance with the oil companies is more like 'trust but verify' whereas the Chenault Meyer stance seems to be just 'trust.' 


  1. Mike Chenault, Republican
    Business experience will be benefit
    Posted: Wednesday, August 16, 2000
    Peninsula Clarion

    Mike Chenault feels his business background will serve him well if he is elected to represent House District 9, which encompasses Nikiski, Kenai and much of Kalifornsky Beach Road.

    "My main reason for running is that I think I can do a good job in Juneau," said the 33-year resident of Nikiski.

    "I have a business background managing a family corporation and I believe that -- and my conservative beliefs -- can make a difference in Juneau trying to get the budget and our state spending under control."

    He said his biggest qualification as a public servant is that he has a desire to help and believes in the area.

    "I sit on the (Kenai Peninsula Borough) school board and have been involved in the North Peninsula Chamber of Commerce," he said.

    Chenault was elected to the school board last year."


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