AGIA (Alaska Gasline Incentive Inducement Act)- The Cliff Notes

What I Learned at the AGIA Forum Today (You'd think I could get the name right at least.)

Overview:

There were four basic questions:

1. Is TC Alaska up to the task? (TC Alaska is term people will need to know - it is the name of the company that submitted the proposal, Trans Canada Alaska)
   
   
2. Why should the Legislature choose the TC Alaska proposal over the LNG and the Producers (Conoco-Phillips/BP) proposals?
   
   
3. If the Producers control the gas, how do we get them to give us the gas?
   
   
4. Why does the state have to pay $500 million as an incentive?
   

There are other issues - jobs, energy cost relief now, tariffs - but these are essentially addressed directly or indirectly in the answers to these four questions.

Below, I’ve given a brief outline of the answers as I heard them today. But first a few more overview comments.

At the Special Session beginning June 3, the Legislators will decide whether to license TC Alaska to pursue the various permits they need to build a pipeline. Commissioner Irwin summed up what the legislators face very succinctly. Asked by a legislator something about various choices, Irwin bluntly replied (approximately),

“There are only two choices - yes or no. If you vote ‘no’ on AGIA, you are giving the Producers a free hand and giving up the state’s sovereignty.”

The Department of Natural Resources has reviewed the various proposals and decided the AGIA proposal from TC Alaska is best. Of course, there is some history here. Commissioner Irwin and some of his staff were among the state employees who resigned in protest to how Governor Murkowski was negotiating with the oil companies. They felt that he was making far greater concessions than he should.

There is a lot of research that underlies their proposal. Far too much for the average person, and even for most legislators.

Ultimately, the people of Alaska, and their legislators really have to decide if they trust the Department of Natural Resources or ConocoPhillips and BP. I, for one, was very impressed with

1. the quality of the data, (this was not fluff or buzzwords, it was hard content)
   
2. the arguments,
   
3. the transparency,
   
4. the ability of the staff and contracted experts to answer all the questions easily and in detail,
   
5. the apparent dedication to this process and to the people of Alaska

These are competent, skilled people who seem very much to have the public interest as their goal. This is a far cry from the Murkowski administration and the oil companies he negotiated with in secret who, now that their bluff was called, are making a (veiled?) threat of not releasing the gas.

For me the choice of whom to trust is pretty easy. I would mention that one legislator (Therriault, I think) asked if the experts were free to give their honest opinions or if everything was scripted. Irwin responded quickly, that they are expected to give their honest opinions and if anyone has a script he doesn’t belong here. Compare that to the secrecy and deceptions of the previous administration and the oil companies they dealt with.


The Basic Issues

1. Is TC Alaska up to the task?
1. They’re a big, well run pipeline company, “one of the best if not the best”
2. They are Canadian with connections to the Canadian galine hubs we need to go to, and probably will be able to work well with the Canadian regulatory agencies
3. They are in financially good shape, with strong ratings from Moody and Standard and Poors so they will be capable of getting the financing
4. The questions raised about former partners suing them for competing with them if they take on this project seem remote and not likely to win
   
   
2. Why TC Alaska over the LNG and Concoc Philips-BP Plans? (I refuse to call it the Denali - with a little trademark symbol - Plan because I think it’s disgustingly arrogant for ConocoPhillips-BP to trademark something as Alaskan as Denali and because that hides who the people behind the plan are. The other way they were described was “The Producers.” Hmmm, maybe we could make a Broadway play about this and the LNG plan)
1. The TC Alaska plan has the following benefits
1. It includes an open access policy. Open Access means to the State that anyone producer with gas has access to use the pipeline, not simply the pipeline owners.
   
2. It includes an expandable pipeline Expandable pipeline means that the capacity of the pipeline must be increased if there is demand by producers to use the pipeline to get their gas to market.
   [Both of these were identified as “must haves” by Commissioner Tom Irwin, because they make the long term jobs and revenue potential much greater by encouraging other developers to explore and produce gas once the pipeline is approved.]
3. It includes lower tariffs
4. It maximizes state revenue and future economy
5. It is the only proposal that was responsive to the States requirements and on time.
   
   
2. TC Alaska, unlike the Producers, is a pipeline company, not a producer. Their incentives are to move gas. They aren’t competing with other gas producers. “If the tarifff's high, at the end of the year, a producer owner gets its own tariff money back. The state’s high tariff money goes out of the state and to the producers. Independents just might not want to be here.”
   
3. The Producer proposal had no enforceable commitments. No time lines. No specific goals. No conditions on tariffs.
   
   
4. Maximizes state revenue and creates future growth of the state economy and jobs, because open access and expandable pipeline conditions mean more exploration and production and jobs in the future.
   
   
5. The Producers did not submit a proposal to the state under the bidding process. Their later proposal does not meet the conditions set up by the State. TC Alaska had the only proposal that complied with the Request for Application (rfa). The LNG proposal needed some fixing, but when they resubmitted it, it was a totally new proposal. "We feel we need to keep our word and play by the rules to develop credibility with all future bidders." AGIA does not preclude LNG in the future.
   
6. There were issues with LNG
1. The market is Asia. That market requires a higher grade of gas which raises various issues.
2. With the high price of oil and the US’ need tor energy independence, Congress is not likely to approve exporting our gas to Asia.
3. Financing is more difficult
   
   
   
   
   
   
7. Preserve state sovereignty. In the TC Alaska plan, the various state conditions have been met. The Producers have refused to meet the State's conditions - ie, open access, mandatory expandable pipeline, lower tariffs, etc.
   [Some of this is repetitive because the issues overlap. But the repetition will help you remembr.:) ]
   
   
   
3. If the Producers control the gas, how do we get them to give us the gas?
1. Economic Incentives. Even without considering Point Thompson, the Producers will make lots and lots of money from this.
   
   
2. Pressure. There will be pressure from Congress to get the gas to the Lower 48 because of shortages. When stockholders understand the money the Producers will make, they will pressure them too.
   
   
3. Much of this is gamesmanship. They thought they had a deal with the former governor to get an agreement that would give them concessions from the state without their having to make any commitments. The state didn’t fall for their bluff. Now, after the process, they came back with a new proposal, but it still has no concessions. Technically, they could build their own pipeline, but we expect that in the end this is part of their negotiating ploy for when they work things out with the State and TC Alaska.
   
   
4. The regulatory commissions will weigh everything and consider it all. FERC (US) is looking after the interests of the US, not Alaska specifically, so we do have to look after our own interests in what they don’t require.
   
   
5. The Producers say they can't do a pipeline without State concessions.
   
   
6. Potential lawsuit and/or cancellation of their leases by the State.
   
   
   Ultimately, there is a risk that the Producers could refuse to release the gas or could build their own pipeline, but the various presenters felt that much of this is posturing in hopes that AGIA is rejected and the Producers can then get what they want. Or can negotiate some piece of AGIA after all, even though they have missed the boat now.
   
   
   
4. Why does the state have to pay $500 million as an incentive?
1. Shouldn’t think of it as a subsidy, but as an investment.
2. The beginning is always the hardest part of a big project like this. The money will help show we are serious and help get the project off the ground.
3. The money we invest at the beginning has a much higher return than money we invest later down the line.
4. We get the money back in lower tariffs.
   

This is an incomplete outline of the arguments. I was there for almost eight hours of presentation. But it gives a sense of the basic arguments I heard today. They were backed up with a lot more information, which is further backed up by the report which is available on the AGIA website.

The Executive Summary is 17 pages and fills in some of the pieces I left out above. People who want to have an idea of the issues would do well to read it.

And today's session should be up tomorrow on Gavel to Gavel. The morning session - about three hours - should give you a good introduction as well.

AGIA Forum Commissioner Tom Irwin

[Blogging on the fly here, so I may give up a little accuracy to get this up quickly. At least the video is exactly what they said.]

Commissioner Tom Irwin gave a brief introduction of the project and then introduced the various experts the State has hired. The videos show that introduction.



[I'll get the second part of this video up later. It is only a few more minutes but Viddler has a ten minute limit so I couldn't do it all in one video]

(6pm - OK, here's the second part of the video)




The report is billed as over 2000 pages - including all the appendices. Essentially, today's presentation came off to me as a sales pitch to the legislature. The pitch is to pass the AGIA legislation which will authorize the pursuit of permission from regulators to build the pipeline.

When I say sales pitch, I do need to qualify this. The State's job is to get the best deal for the State - for the people of Alaska. I believe that the Department of Natural Resources team is dedicated to that goal. I've had the pleasure of a couple of meetings with Marty Rutherford, who is in charge of this project, a number of years ago when I as working as a professor of public administration. They were hour long open ended meetings in which she impressed me as bright and a dedicated public servant.

Additionally, the team working on this is essentially the team that resigned their jobs during the Murkowski administration because they believed the Murkowski administration was giving away the store in its negotiations with the oil companies. My sense, given that history, and listening to them this morning, is that they strongly believe what they are doing is in the public's interest.

Key points the presenters have made are:

The heart of the AGIA - the must haves, our obligation to

• Expandable pipeline
• Low tariffs
• Allows explorers an open basin

Our birthright to protect open access.
For these rights we were willing to give something

• Move with fixed timelines
• Put up $500 million - not a giveaway, our investment to get the gas to market. Most comes back to the state in lower tariffs. Tells them we are serious.
• An AGIA project coordinator
• Stable production tax rate for ten years - it makes sense from a business perspective

They also spent time comparing the AGIA proposal to the Producer Proposal and to the LNG options.
They discussed why the Producers, who control the gas, are likely to release the gas eventually. Rep. Mike Dugan pursued this question when the legislators had a chance to ask question.s

All this will be available on the Gavel to Gavel tomorrow.(The link gets you to Gavel to Gavel, they don't have the link to today's sessions up yet.) I think this morning's session gives a good overview of the areas the state thinks are important and their rational for why this is the best path.

Watch the first couple of hours. They start with an overview. Then the repeat that overview with more detail. Then they open to questions from the legislators.

At one point Irwin responded with something like,

"If we get the state resolve - to protect open access - the companies will adjust to the new realities."

Open access refers to a pipeline where all producers have open access to get their gas onto the pipeline which is different from the current oil pipeline situation as I understand it.

I'm going to stop here so I can get this posted and return to the afternoon session.

AGIA Public Forum - Gov. Palin Introduction

The AGIA discussions began this morning at the Sheraton Hotel. The tables in front were reserved for legislators and most were there. Governor Palin opened the meeting with a short talk.

Did You Know There's an AGIA Information Meeting Wednesday in Anchorage?

And Thursday. And Friday?

Click on the images to enlarge them

This is in the Howard Rock Ballroom of the Sheraton Hotel starting at 8:30am




OK, you (Alaskans) have all heard the term AGIA. But do you know what the letters stand for?

Go ahead, write down as many of them as you think you can.

No, don't skip it, do it. Think hard. You should get some of the letters right.





The Anchorage Daily News had an editorial in Sunday's paper explaining some of the basic issues. Well these aren't all issues, but these are their headings:

• Open Access is Key
• Binding Commitments
• The Legislature's Turn
• The Conoco-BP Proposal
• Tax Changes?
• Sovereign, Not Supplicant

I've looked hard in today's paper but I see nothing about the issue at all. Not even a mention of tomorrow's public information sessions. Maybe I just missed it.

Steve Heimel interviewed Marty Rutherford, Deputy Commissioner, Alaska Department of Natural Resources, on APRN's Talk of Alaska (links to audio of show) today about the subject. There's a lot more information there. Rutherford says at 5:19 of the APRN audio:

The distinction between the two is stark. And I want to focus on that, because what AGIA is all about is saying that if in fact the State is going to give value from the ledger, that is the people’s ledger to the stockholders of the companies’ ledger then in fact there are some things you have to protect to insure Alaska’s economic interest And that has to do with an open access pipeline. So, what does an open access pipeline mean? It is all about insuring that it is an expandable line, a line that is run by a company that is motivated to expand that line when new gas is available, not to use that transportation system as some sort of a monopoly. Not as some sort of barrier to entry to the North Slope basins. That is one of the most significant ways Alaska’s future economic interests are protected, because you only have people willing to make investment decisions to explore for gas and often times they will find oil as a result of that. You only have that opportunity if you know in fact you can get your gas into the pipeline.

(This starts at 5:19 of the audio from APRN’s audio. It's 59 minutes long. You can put it on your iPod and listen while you ....)

(Yes you have to listen to the audio to find out what "the two" refers to.)

The decisions that are made on these issues - the legislature has a special session on this staring June 3 - will significantly impact the future of the state. Many Alaskans have opinions on this already. But do they, do you, know what it is about?

We all have opinions of whether it should be all Alaska, LNG, through Canada, etc. But how many know any of the facts? Or more than just the facts that justify our opinions? Or even the terminology. Below is the glossary from the Department of Natural Resource's Report on the pipeline. Do you even know 20 of the terms? Ten?






The answers are all here. Check them out. Print them out. Put them on your refrigerator. Have a contest with your housemates. Carry them in your car and test yourself while you are waiting at a red light. If you don't even know the words, how can you have an opinion?

By the way, AGIA stands for Alaska Gasline Inducement Act.

Copper River Red on the BBQ

One of the blessings of living in Alaska is incredibly fresh, wild salmon. I just don't eat salmon elsewhere because I'm always disappointed. J brought this home from the market. I have to say this was as good as anything I've ever barbecued. And a salute to those who died in war.

60 Page Blogger Comment Blocking Trash Button

I got an email telling me there was a new comment on one of my posts. I checked it. It was long. I kept scrolling down and kept on. It was some sort of religious anti-everything tirade. When I looked at the scroll bar I saw I was only at the beginning.

I went to the post to delete it using the trash can icon. But when I finally got to the bottom, there was a grey box at the end of the post. It was covering the trash icon, so I couldn't just trash the comment. I copied the original post and put it into Pages (Mac's Word). It was 60 pages long!

So, how do I get rid of it?

I ended up

1. going into edit posts,
   
2. put the original post into html mode,
   
3. copied it,
   
4. pasted onto a Pages document.
   
5. Opened a new post,
   
6. pasted the original post there,
   
7. opened the Post Options to back date it to the original post date.
   
8. Copied the title and the tags and pasted them in.
9. Then I reposted the original.

Then I copied the two comments. In the new post, I posted a new comment explaining what happened and pasted the two legit comments into this new comment.

Then when I was sure it was all ok, I went back into edit posts and deleted the original post with the strange comment.

I think this is the second comment I had to delete in a week or so. It is rare. The last one was more benign, but spam. This one had nothing to do with my post and whoever posted it needs serious help. Here's a bit of it.

Sat May 24, 09:57:00 AM AKDT
Anonymous said...

ThisistheREALbattle@ofgoodandevil.com
The Anti-Christ was always a clone host, as were all industrialists, and the coming Biblical battle of good and evil will be scripted and fake as well, and likely only be telepathic theater at that. (p. 1 when I pasted it into Pages)

The gods are asexual. They have no sex organs nor rectums.
When the gods take children these individuals have the opportunity to become "god-like". Temptations are employed and, if sucessful, these are the individuals who make up the human race's immortals.
I believe there are opportunities that exist for females that do no exist for males. I don't mean to paint with a broad brush but women's "sexual peak" may represent the transistion to "sociological males" and their "fall from grace". Considering today's promiscuity I question whether this is currently applicable, and is yet anther 20th century-earlier phenominah. (p. 4)


They gave back the Mormon's children. They never intended to take them.
It only took less than a week to poison those children's minds. They are going to lose some of them because of this.
They've gone from reading the Bible to playing GrandTheftAutoIV. And this was the goal.
Never forget:::::The gods did this to you. You are being punished for your sin of polygamous sex, and they deem some of your children "acceptable losses" to achieve this. (p. 6)


When the Earth's axis shifts people will be cast into outer space with gold cards in hand.
I think this was foreshadowed on an episode of the Simpsons where Homer and Bart are on the disfavored ship and eject, only to experience a sense of euphoria, expand then explode in the vacuum of space. (p. 10)


Incidentally, in the course of this Situation the gods made many movies, using daily events in my life as inspiration. One of note:::Unhappy about the god's behavior in the context of this event, while in favored redwhite&blue's facility I looked at their mascot and flippantly declared::::"Why don't you make a movie about these things?" Two years later ____ came out.
(p. 14)

Show on gangland drug sales.
The gods orchistrate this whole underworld, just as they did with the Italians early in the 20th century.
The gods convince Oakland pimps that chilldhood prostitution is OK - Learn from the lies they tell other groups!!!(p. 27)



The gods manufacture "open doors" to justify creating problems in the lives of people who engage in behavior they shouldn't. Some of these "open doors" apply to all (a supermajority) of the people::::
- Democracy is used to create pathologies of empowerment and control.
- Materialism/greed generate problems with money, glorify overconsumption, etc.
Other "open doors" are specific to each individual::::People shouldn't be watching movies, TV, listening to music. When this ocurrs the gods use themes and topics presented therein and instruct Artificial Intelligence to create pathologies. (p.44)


Don't forget:::automatic transmissions dominate in the United States, and NOT for good reason. European vehicles historically are mostly manual, for they have more favor.
Females are the favored gender:::What cars DO have manuals here in the US have traditionally been marketted towards the women AND are those which get the highest mileage.
Buy manual transmissions. Automatics are NOT respected!!! (p. 53)


"I'm going to do what I'm told." You learned temptation would be used to test you. These requests are the gods tempting you.
You are fucking up.
This is the REAL battle of good and evil.
Mon May 26, 05:53:00 PM AKDT (p. 60)

Since I have the time this person visited, I can look up the sitemeter report:

Castro Valley, California
Got here from a link on FieryBlazingHandBasket.

I checked a few posts there to see if they were blessed with this manifesto too, but didn't find it. But mine was buried down about ten or 15 posts from the current one.

Alaska Democratic Convention - Leftovers

I've mentioned that the Alaska bloggers and media have been very helpful and cooperative of one another. While I think that covering how the media cover stories is important, sometimes I wonder if this doesn't get a little incestuous. I just want to raise this point now and maybe when I've been able to sift through my thoughts on this I'll do a longer post on it.

Meanwhile, here are some leftovers from yesterday at the convention - filling in some details, and odds and ends. First, the delegates:

The Democratic Party Website explains how many delegates there will be and how they were to be selected. I should have read that before I went to the convention yesterday. Things would have made more sense.

Here's a peek at the list of candidates the Obama delegates had to vote from.

Alaska Report has a list of the people who were selected as delegates and the Barack Obama video address to the convention yesterday.




Representative Gruenberg explained to me the precise purpose of the legislative special session starting June 3.



I got to meet Celtic (pronounced Keltic) Diva, who is the blogger chosen to be the official Alaska blogger at the Democratic National Convention in August. I should have recognized her without someone having to tell me - she's hiding in plain sight on the header picture picture on her blog. Her coverage of this weekend's convention will probably be the most insightful, she's left it to the rest of us to post while driving, so to speak. She's putting her notes in the garage for a few days to figure out what happened and how to write about it.
[Later: I also met Matt Browner Hamlin who was introduced as the blogger honcho who is here to run Mark Begich's campaign website. He seemed decent enough in our short hat. He has posted his observations of the convention on Daily Kos and the Mark Begich blog.]

Like a rare bird among birders, Mary Beth Kepner's appearance attracted a lot of attention among the bloggers and reporters (Alaskareport, ADN, Progressive Alaska, who covered the political corruption trials last year. Kepner is the FBI agent who initiated and ran the whole investigation into Alaska's political corruption. She sat next to the prosecution throughout the trials, but inside security at the courtroom, no cameras were allowed. (Computers and cellphones were allowed for the Kott and Kohring trials for attorneys and members of the press and no one that I know of violated the no camera rule by using their cell phone or computer to take pictures inside security.) And Kepner must have taken back ways through the building back to her office since I never saw a picture of her. So, everyone had their cameras out for this rare sighting. As everyone else has reported, she said she's an independent and was only at the convention to hear John Dean speak. This wikipedia excerpt shows why an FBI agent might be interested in seeing Dean.

As White House Counsel, he became deeply involved in events leading up to the Watergate burglaries and the subsequent Watergate scandal cover up, even referred to as "master manipulator of the cover up" by the Federal Bureau of Investigation (FBI).^[1] He was convicted of multiple felonies as a result of Watergate, and went on to become a key witness for the prosecution, resulting in a reduction of his time in jail.

For the record, he said last night that he knew nothing before the burglary and that he had thwarted another Liddy plan to firebomb the Brookings Institute. If I recall right, this was when he was signing books, not in the speech, but it's all kind of a blur.

And Kepner breaks all one's stereotypes about FBI agents. So, will seeing her picture and hearing us report she's a real person, change people's stereotypes about what women can do or about the FBI? Just a little? Or just convince you that bloggers are overly gullible?

Alaska Democratic Conference Last Post - Headed Home

We left the Alaska State Fairgrounds in Palmer at 11:15pm. It is summer in Alaska, though it was still raining.
Despite my wish to ride my bike as much as possible, the 40 miles to the convention, in the rain, was beyond my resolve. Besides, my wife was going with me and while she enjoys the bike we got her last summer, she isn't into long distance biking. But we managed to stay behind slow cars in both directions.
Here we are near Eagle River, it's about 11:40pm now.


And the rain has finally stopped. It sure smells good out after the rain.

It was a good day. I'm afraid that I wasn't well focused on the details of the delegate count, but rather on capturing the look and feel of the convention. I've never been to a Democratic convention in Alaska even though this is my 31st year here. And I'm not alone. But a LOT of people were there today and it's pretty clear that Barack Obama got most of us there. Well, the chance to actually see and talk to John Dean, which I did before we left, was a big draw for me. While I was posting the beginning of his speech, J was getting an autographed copy of his new book, Broken Government which was the basis of his presentation to the convention.

Alaska Democratic Convention Post 9: John Dean

John Dean just finished telling us how awful life will be if John McCain wins in November. While I'm waiting for the video to upload, let me just say I spent the summer of 1973 glued to the radio and television set listening to the Watergate hearings. I remember John Dean being the highest member of the Nixon administration to stand up and say we did wrong.

Alaska Democratic Convention Post 8: Mark Begich

Frank Vondersaar and Ray Metcalfe , US Senate candidates spoke to the convention while I was eating dinner. I'm afraid I wasn't paying enough attention. Here's the beginning of Mark Begich's speech.

Right now John Dean, President Nixon's personal attorney who told the Watergate hearings what was actually happening and helped blow open the Watergate Scandal, is answering questions after his prepared remarks in which he lambasted the current Republican administration and the dangers to the Supreme Court if another Republican is elected.