Two days before she was selected as John McCain’s running mate, Gov. Sarah Palin signed a state law assigning a license for a $30 billion natural gas pipeline contract to TransCanada Pipelines, Ltd.
As part of that licensing deal, the State of Alaska added a big sweetener, taxpayer money. "A state license would mean streamlined permitting and a state match of up to $500-million for funds TransCanada spends on preconstruction costs," Reuters reported. http://www.nationalpost.com/...
Palin and a team of lobbyists pushed the deal in the Republican-dominated Alaskan legislature over a competing project by Conoco-Phillips and BP with no demand for taxpayer subsidies. Oddly, though, there's no binding guarantee that TCP ever really has to deliver a pipeline.
That's like spending a half-billion dollars to build a stadium, but without any written clause the contractor would even begin construction.
Palin is now campaigning on her purported reputation as a squeaky clean "maverick" reformer and ethics watchdog. This is the deal that demonstrated she could run and deliver with the Republican big dogs in Washington.
MORE details, below . . .
Gov. Palin's Taxpayer-paid Energy Subsidies
Palin was elected Governor of Alaska in 2006, and previously had no executive or legislative experience, except two years as Mayor of a rural town of 9,000. But, with the TransCanada deal she has shown obvious talent as a rain-maker and dispenser of corporate largesse that puts her in the big leagues of Republican politicians.
Governor Palin, lauded by the GOP base as a doctrinaire anti-choice social conservative and supported by the arch-free market Club For Growth, has proven she is ready to give away the Treasury.
Palin is no fiscal conservative. She was for the notorious "bridge to nowhere" before she was against it. Palin's judgment in the big giveaway to TransCanada was questioned from both sides of the isle:
"Government interjecting itself into a market place has seen colossal failure after colossal failure after colossal failure," said House Majority Leader Ralph Samuels, an Anchorage Republican. "Government is ill-equipped to start picking winners in the marketplace." Ibid.
While the pipeline deal was being debated, Palin got Alaskan lawmakers to approve a second massive giveaway. Earlier this month, she added to the generous mood in Juneau by sending out a $1200 state check to each resident. That measure was pushed through with Palin's support over several more modest proposals. In the rest of the U.S. we call that welfare, but in Alaska, it's revenue sharing or "energy assistance".
A Shaky Deal
The half-billion in Alaskan taxpayer funds is not refundable, even if the project never delivers a single cubic foot of Prudhoe Bay natural gas to American consumers in the Lower 48. Based on TransCanada's track record, there's a good chance of that.
The state money is merely an incentive to start pre-construction work on a proposed 1700 mile line through Canada to existing terminals in southern Canada. The bulk of the project will not provide U.S. jobs.
After intense lobbying by Palin and her corporate allies, the contract was awarded to TCP, a Canadian-based company. In the late 1970s, TCP started work on a similar project proposed by Jimmy Carter along the same route. The project stopped after natural gas prices fell in the 1980s. That left a potential $9 billion liability to its partners, should TCP ever complete the pipeline. The company’s lawyers dismiss the possibility that such a sum would ever be recoverable by its former partners, which include Pacific Gas & Electric and Lowes Corporation in the United States. See, http://lba.legis.state.ak.us/...
Palin pushed the TCP bid over a rival plan offered by Conoco Phillips and BP. Unfortunately, realization of Palin’s promised pipeline requires a coming to terms with these same companies, along with Exxon-Mobil, which together control production of Prudhoe Bay oil and natural gas concessions. Federal licensing processes in Washington and Ottawa and other regulatory and financial hurdles must also be cleared before the project gets off the drawing board.
In early August, as the Alaska license neared, TransCanada floated a bond offering worth some $1.5 billion, snapped up by investors in expectation that Palin would work her charms over Alaskan lawmakers. http://www.reuters.com/... That was, apparently, a good bet.
Welcome to Washington, Sarah Palin. You’ll fit right in. Take a seat in the "reformer" section, right next to Maverick.