Power is Money, in one form or another. And it's easier to harvest than pick off trees when it bubbles or boils or leaks out of the ground.
Pipe Dreams
Alaska is home to gigantic untapped natural-gas fields. But can the state and energy industry finally agree to build a pipeline to transport the fuel? Tony Hopfinger
Newsweek Web Exclusive
Updated: 11:17 AM ET Jun 2, 2008
As Americans feel the pinch at the gas pump amid $128 a barrel oil, there's at least one place in the United States where high energy prices aren't all bad news. Alaska, home to America's prolific oil fields, is reaping billions of dollars in record oil-tax revenue. That, along with a populist governor determined to deliver a megapipeline project to the state, is fueling optimism among Alaskans that an energy boom may be just around the corner.
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Palin's strategy is complex and fraught with all sorts of potential pitfalls, including the fact that any project depends on these same companies pledging their gas holdings to fill the pipeline. (TransCanada builds and operates pipelines but doesn't own any Alaska gas.) "The wrinkle in the pavement here is who tells who what to do when?" says Bill Gwozd, vice president of gas services for Ziff Energy Group, a Calgary-based consulting firm. "Oil producers don't appreciate somebody trying to force them to do something."
Alaska owns the natural gas; BP and Conoco, along with Exxon, hold most of the leases to develop it. The companies have long talked of tapping the reserves, but have consistently deemed the pipeline too financially risky without the state first agreeing to favorable terms on gas production taxes. Unlike Palin's predecessor, Gov. Frank Murkowski, who wanted to give the companies generous tax breaks, she has refused to budge.
Any multi-billion-dollar play in the energy business is a gamble, and Palin's adversaries are among the best at the game. Skeptics wonder if BP and Conoco are grandstanding to kill the TransCanada proposal, with no intention of developing their natural-gas holdings until the state gives them favorable terms on gas production taxes. To those wary of decades of dashed dreams and false promises, Doug Suttles, president of BP's Alaska operation, recently told reporters, "Watch, just watch."
"We are all watching carefully," Palin says, "but we won't sit by and wait either."
The 44-year-old governor embodies a growing anti-oil sentiment among Alaskans frustrated by the industry's lack of progress in building a natural-gas pipeline. She's enjoyed some of the highest approval ratings of any governor in the country since taking office in December 2006, with some grass-roots Republicans suggesting her as running mate for presidential candidate John McCain.
Yet, her dealings with Big Oil sometimes seem utterly un-Republican. Palin may not command an army to seize the people's oil fields like Hugo Chávez does, but that hasn't stopped her administration from trying to revoke lucrative leases at one giant oil and gas reservoir, alleging Exxon and its partners have dragged their feet for decades to develop it.
SNIP...
Getting
resources to market is of increasing concern to the state. High oil prices are enriching Alaska beyond the imagination—if oil averages $120 a barrel over the next fiscal year, the state will collect an astounding $12.6 billion, the Alaska Revenue Department says. But one crude reality remains: the reserves are drying up.
Alaska depends on oil taxes and fees to fund 90 percent of its budget revenue (residents pay no income tax; a $39 billion oil-wealth savings account generates an annual dividend for Alaskans, with last year $1,654 going to every man, woman and child). The oil fields produced about 740,000 barrels last year, down from a peak of 2 million in 1988. It's not that there isn't more oil to be found, it's that the best prospects—ANWR and the Arctic Ocean—face unrelenting opposition from environmentalists. The recent Interior Department decision to list polar bears threatened will almost certainly spawn lawsuits to try to block the search for crude in the bear's Arctic habitat.
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http://www.newsweek.com/id/139335
Her hubby works for a natural gas company.
PS: If Alaskans get a piece of the action on oil sales, why doesn't the rest of U.S. get a share?