By: Sarah JonesJan. 21st, 2011more from Sarah Jones

Sarah Palin's Pipeline Fantasies Up in Smoke

Alaskan state legislators want to repeal Palin’s failed Alaska Gasline Inducement Act project, the very gas pipeline she touted as proof of her energy experience in 2008 while running for Vice President. In fact, when Palin referred to AGIA, she used words that insinuated it was a done deal, when in reality, it had not even began yet.

Sarah Palin, 2008 Vice-Presidential debate: “We’re building a nearly $40 billion natural gas pipeline — which is North America’s largest and most expensive infrastructure project ever — to flow those sources of energy into hungry markets.”

Of course, there is no pipeline. There never was. What Palin was referring to was the license the state awarded Trans-Canada to build the pipeline under Palin’s largest claim to fame, AGIA, a project that provides up to $500 million in state reimbursement for TransCanada’s costs and in fact guarantees the oil company a profit. Profit will be subsidized by the state, so the burden of risk is being handed down to the taxpayers.

Unfortunately, by August of last year TransCanada had failed to secure any shipping bid agreements by the deadline set forth under AGIA. In the meantime, Alaska has already paid out 37 million dollars to TransCanada for just thinking about the pipeline and they’re getting ready to pay out another 100 million this July. Parnell has asked them to set aside 160 million for next year.

Now, if you’re a fiscal conservative, you must be wondering why it makes more sense to hand out hundreds of millions of dollars to a company for doing nothing other than trying to get precedent agreements rather than simply having the state build the infrastructure of the gasline. Instead of this common sense solution, Alaska is subsidizing two private corporations, TransCanada and Exxon Mobil (working under TransCanada), whose behavior in the wake of the Exxon Valdeez oil spill is a source of lingering bitterness in the state and many Alaskans viewed as a betrayal of Palin’s campaign promise to put Alaska first.

If the gasline isn’t built, the state could be on the line for treble damages to TransCanada on top of the hundreds of millions already paid out to them while they try to find shipping bidders.

If your alarm bells are going off now, rest assured that the AP already investigated the bidding process and found the process to be seriously flawed by the Palin administration’s close ties with the winner of the contract. Not only did Palin hire a previous TransCanada lobbyist to serve on her pipeline panel, but Palin herself had direct contact with the company in May of 2007 according to her official calendar after the bid went out – something she had been repeatedly warned by legal experts to avoid at all costs. This is simply not supposed to be done in government contracts, where decision makers are shielded even from the identification of the bidders’ questions through various walls. This was certainly a departure from the Palin who ran on ethics reform, transparency and sticking it to the big boys. Something had changed.

It turns out that in January of 2007 just months before AGIA was finalized, then Vice President Dick Cheney had contacted Palin to urge her to draw in big oil companies to her pipeline project. One wonders in retrospect just what enticing words of encouragement he offered Palin about her national opportunities should she pull this off.

By the Nov. 30 2007 bidding submission deadline, there were five applications. The state disqualified four for failing to satisfy the bill’s requirements. That left, gosh golly, who was it? Oh, yeah, TransCanada, with whom Palin spoke on the phone against legal advice after the bidding was opened. This unethical breach was explained away in 2008 as “competition.”

“Gov. Palin held firmly to her fundamental belief that Alaska could best serve Alaskans and the nation’s interests by pursuing a competitive approach to building a natural gas pipeline,” said McCain-Palin spokesman Taylor Griffin.

And to add insult to injury as we watch hundreds of million dollars go down the drain that could be building the pipeline for real, the winner of the contract had offered to build the pipeline without a state subsidy just four years previously.

Guess who owns the rights to the gas leases that TransCanada needs to get to bids on using in their project? BP and ConocoPhillips, who just so happen to have a pipeline project of their own called the Denali Project. Now why would they want to grant TransCanada access to their leases for shipping when they want to be the company building the gasline?

Palin’s windfall profit taxes (based on profit and hence impossible for producers to calculate in advance) are yet another obstacle to the contractor securing a precedent agreement, as the companies want to know in advance just how much money they will be taxed by the Alaskan government. Something Palin criticizes the Obama administration for even considering on a federal level, without ever acknowledging that she herself imposed windfall proftis taxes on oil companies.

Sarah Palin knew all of this when she stood in front of Americans at the Republican National Convention and smirked about her superior qualifications as an energy expert. In fact, her pipeline was not built in 2008 when she told you it was already began and it looks as if it may never be built. It is in danger of being repealed – a movement led by Republicans. Having received no bids by the deadline last year, yesterday the ADN reports Alaskan legislators as saying,

“There is support here to just scrap the whole AGIA process,” House Speaker Mike Chenault, a Republican from Nikiski, said on Thursday. Senate Finance Committee co-chairman Bert Stedman made similar remarks after Gov. Sean Parnell’s State of the State address Wednesday night. “I think it’s quickly approaching the time we look at cutting our losses and freeing the state from the shackles that are put on us under the AGIA agreement with TransCanada,” the Sitka Republican said…..Legislators are not planning to take action to try and repeal AGIA during this year’s 90-day legislative session. But some are frustrated about providing TransCanada with the agreed-upon state money.

Cutting loose from the shackles, eh? That phrase rings a bell.

Sarah Palin got her “energy expert” label by sitting on a board as the citizen watchdog (not an expert, as she would have you believe) – an appointment she got from then Governor Murkowski as repayment for her stumping for his campaign and allegedly as consolation prize for his giving his Senator’s seat to his daughter Lisa. Did you know Palin quit that job, too? Perhaps it will soothe you to know that she did it after hacking into a fellow Republican’s computer and filing an ethics complaint against him. She was for ethics complaints before she was against them. It seems ethics complaints are something only to be utilized against her “opposition.” It was this single act that propelled her as a common sense solution to the good old boys in Alaska during her 2006 gubernatorial run.

“Most definitely TransCanada got a sweetheart deal this time,” said Republican Sen. Bert Stedman, who voted against the TransCanada license. “Where else could you get a $500 million reimbursement when you don’t even have the financing to build the pipeline?”

Where else indeed but from the Republicans’ “energy expert” and “fiscal conservative” who hates the “feds” and is against government bailing out big business. Or rather, someone who plays that part on TV. Never fear, Governor Parnell is busy putting lipstick on this pig because he, too, knows which side his bread is buttered on.

And now you know more than you ever wanted to about how incompetency and greed in an elected official can cost you a lot of money. See, it really does matter that they be willing to learn new things and be interested in governing, not just perpetrating dishonest myths about themselves based on non-existent pipelines. And while all politicians are prone to exaggerate their accomplishments, Sarah Palin has taken this to previously unscaled heights of crazy-making.

It’s ironic that with all of the “repeal the bill” that Sarah Palin is being credited with regarding the healthcare law (a law that actually implements the values of competition among private entities that you hear Palin chant as one of her foremost values), it is her gasline bill that killed competition with a flawed bidding process that is being seriously considered for real repeal this fall. And if they trash AGIA because it’s simply unworkable, was always unworkable due to being poorly crafted, it won’t be for show. It will be for real. And Palin’s single largest claim to expertise will go up in smoke with it, right along with the myth of Palin being America’s Energy Independence Sweetheart. Of course, that won’t stop her from pretending it’s already being built.

But, then, nothing can stop her from her addiction to self-aggrandizing myth building about the Palin brand.