Editor’s note: This is the second article in a two-part series detailing Republican Gov. Sean Parnell in his roles as an Alaska resident, governor and candidate for office. The first pasrt ran in Monday’s Clarion.
Republican Gov. Sean Parnell is all smiles over the Alaska liquefied natural gas project that proposes to build a second major pipeline in the state connecting North Slope resources to market.
The hope is that the AKLNG project will become a second lifeline for the state both in revenue and in affordable energy, particularly in the Interior where costs skyrocket during the cold winter months.
That hope has existed for decades, but it came one step closer to becoming a reality last week when the project partners, including the state, filed for an export permit with the federal government.
“It is an unprecedented step in that the state and these companies are aligned in moving Alaska’s gas to Alaskans,” Parnell said in an interview with the Empire last week. “When an export license application like that is filed, that’s another significant step toward getting a gasline.”
But it’s not one of the first steps. While talks about a gasline have risen and fallen in intensity a number of times over Alaska’s history, this latest effort started accelerating about 14 months ago after the 2013 Legislature approved Parnell’s hallmark legislation — SB21.
“It takes a healthy oil industry to give us a shot at a gasline,” Parnell said.
The governor’s oil solution
Like many Alaskans, Parnell was a believer in the ACES tax structure implemented by former Gov. Sarah Palin at first. But over time, he says, problems began to surface in increasing frequency. Eventually it became apparent to the governor and his administration that change was needed.
“It’s about the long term,” Parnell said in describing his thinking behind SB21. “It’s not about getting as much as we can right now and sacrificing our kids and their future by riding production down at 6 to 8 percent like we were.
“Alaskans deserve better than that,” he added.
So Parnell’s team crafted a package designed to both increase the volume of oil produced and shipped through the pipeline and to attract new investment from the current producers so the trend of declining production is reversed.
“There’s a lot more oil in the ground in this state than we have recovered or that we can recover in your lifetime or mine,” Parnell said.
Democrats and others have dubbed the proposal “The Giveaway,” however, saying it was a favor to oil companies that gives away the state’s resources without extracting adequate taxes and fees. Enough Alaskans agreed with that thinking that an initiative effort to get a repeal vote on the general ballot was successful.
Short-lived investments?
On August 19, when voters submit their primary votes for elected officials they will also be faced with a “yes or no” question that carries substantial economic and political implications.
Voters can vote “yes” to repeal SB21 and return the state to the ACES tax structure, or they can vote “no” and keep the new SB21 in place.
The governor and his allies in support of SB21 point to billions of dollars in new investment. Their opponents say those investments would have happened anyway or are for show.
Parnell doesn’t think so. If SB21 falls, the governor expects that new investment to leave the state as quickly as it came.
“What happens if we go the other direction on August 19? Uncertainty is created, and that equals risk for Alaskans,” Parnell said, adding that the billions invested “will go to a safer place. It’s the nature of economics, and it’s the nature of what you and I would do if our money if our savings were at risk in a particular bank.”
While Parnell said he has not talked with individual companies about their plans should SB21 be repealed, he pointed to a situation in the early 2000s when one of the Big Oil companies took planned investment dollars out of Alaska because a permitting process took too long.
“That investment money moved and was no longer available to Alaskans and the Alaska branch of that company,” Parnell said, citing an email he had seen from the company’s headquarters. “Any time we take too long, any time we create uncertainty, any time we’re not competitive as a state it’s too easy to lose those jobs and opportunities for Alaskans.”
Bringing back the tourists
Between 2007 and 2008 Alaska saw a (then) record-setting number of visitors, but by the time Parnell took office two years later things weren’t going well. In light of the national recession that had caused many Americans to slash their vacation spending, Alaska’s numbers had been declining since the record-setting year.
In order to right the ship, Parnell traveled to Florida for a trade show to meet with executives from the cruise ship industry and figure out how to respark the national wonder of traveling to and exploring America’s Last Frontier.
He emerged from the meetings with a three-pronged approach to reversing the declining trend of visitors. That plan consisted of reducing the head tax on visitors; crafting cruise regulations that are consistent and clear; and increasing the state’s budget for marketing itself to the Lower 48 and the rest of the world.
“It’s all about creating an environment here where travelers and investment in the travel industry will come to Alaska,” Parnell said.
Just last week the state announced a third consecutive year of growth in the number of visitors over a year’s time — and this year the previous high, which had been set just before the recession, was broken.
“We are seeing the benefits of an effective tourism marketing program,” Susan Bell, the commissioner of the Department of Commerce, Community, and Economic Development, said in a press release.
Against attack advertising
This election year might be one of the few when the governor’s race takes a back seat to another political contest. Control of the U.S. Senate is up for grabs this fall, and Republicans are likely to take control, according to the Washington Post’s “Election Lab.”
In their effort to regain control of the Senate, national Republicans have identified freshman Sen. Mark Begich, D-Alaska, as a vulnerable candidate, and they’re funneling millions into Alaska to unseat Begich. Democrats are paying millions to protect him.
Parnell doesn’t like the negative ads from either side one bit.
“It diminishes us as a people to engage in that reputational destruction, as I call it,” Parnell said. “We try to destroy each other instead of trying to solve problems for Alaskans and meet those challenges.”
While the majority of advertising — and, therefore, negative attack ads — are centered on the Senate race, there have been negative ads and statements made in governor’s race as well — but Parnell is opting for a different course.
“I try to keep myself and our staff on that high road,” Parnell said.
That doesn’t mean Parnell won’t be working with the Republican nominee to unseat Begich this November, however.
“For the last six years, Sen. Begich has supported President (Barack) Obama much of the time, and he’s criticized me for standing up for Alaska in terms of litigating federal overreach,” Parnell said. “I want a fighter for Alaska in those congressional seats, not somebody who will walk in lock-step with the Obama administration most of the time.”
