Sunday, January 17, 2010

So far, Parnell looks like Palin Lite

I had high hopes for Sean Parnell when he took office last July. After Sarah Palin, it seemed a bright young governor who had a positive relationship with the oil and gas producers would be an improvement.

But so far, Parnell has looked more like Palin Lite, a charisma-free copy of his predecessor. He still has time and opportunity to redeem himself, notably if he kills that foolish attempt by Tom Irwin and Marty Rutherford to cancel the Point Thomson oil and gas leases held by Exxon and its partners.

It should be an easy decision. After all, if state lawyers get the Superior Court judge’s decision overturned and Natural Resources Commissioner Irwin’s attempt to cancel the leases is upheld, they could kill the gas pipeline. It really is as simple as that.

The state’s tussle with Exxon over development of Point Thomson goes back a long time. The company appeared to be dragging its feet on drilling and development for years, though there was no pipeline to take the gas away and the high-pressure field has tremendous engineering challenges, on which it spent many millions.

In 2006, Gov. Frank Murkowski decided to poke his finger in the corporate giant’s eye and moved to cancel the leases. Asked later why he did it, Murkowski said he wanted the Exxon people to come back with a better development plan and a firm commitment to carry it out. “And they did,” he said.

But Palin, Irwin, Rutherford and now Parnell have continued the fight and carried it to ridiculous extremes, putting Alaska’s economic future at great risk. Last summer, Irwin said he didn’t trust Exxon to fulfill its promises, so the commissioner’s uneasiness keeps the legal battle raging. He should try taking a Valium.

The gas pipeline is no sure thing by any means. And Point Thomson contains more than 8 trillion cubic feet of gas, a volume needed for pipeline viability. If those leases get tied up in a decades-long legal hassle — to ease Irwin’s worries — the gas could be nearly worthless by the time the mess gets untangled.

Irwin and his deputy Rutherford are both good people, but they have a doggedly negative attitude toward the North Slope producers that should disqualify them for their jobs. If they persist in the attempt to get the leases canceled, and Parnell goes along with it, this state may find itself back where it was at statehood in 1959, but without the bright prospects.

Idiotic public policy sometimes seems a way of life in Alaska. And that aimed at Exxon in retribution for the 1989 tanker disaster — plus the Palin-Irwin-Rutherford claim that Alaska didn’t get a big enough share of the North Slope pie — is classic dog-in-the-manger politics.

Oil money has funded this state’s government for two generations, Alaska did away with its state income tax 30 years ago and we have a free-money program that sends just about every living soul here a nice check every October.

State leaders came to terms with the companies exploring and developing the North Slope years ago. As a result, billions in investments were made, billions in taxes and royalties were collected. But now some of our leading lights want more. If this were 1898 and you tried that on a gold mining partner, you would be asking for a necktie party.

Sure, it’s politically incorrect in Alaska to say good things about Exxon. I don’t know any of the current bunch, but some of the finest people I’ve ever met were Exxon employees. That includes Otto Harrison, who headed up the Exxon Valdez cleanup; many of the engineers and managers who worked for him and those that helped build the trans-Alaska oil pipeline; and the late Max Nalley, who was the company’s public affairs manager for several years.

The list also includes my old hunting and fishing buddy, Hank Rosenthal. Hank was delivered to Alaska by the icebreaking tanker Manhattan, which reached Prudhoe Bay via the Northwest Passage. He was the public relations guy on the project. I was in public affairs at ARCO in those days and Rosenthal became my Exxon counterpart (actually the company was named Humble Oil & Refining in those days).

Hank and I both had statewide responsibilities and could always come up with a reason to meet with people in Unalaska when the geese were in at Cold Bay, Southeastern Alaska when the ducks were flooding in there, and in summer anywhere the salmon were running.

Hank left Exxon sometime in the 1970s and took my job at ARCO when I decided to bail out in 1980. (I gave him a heads-up before I told my boss I was quitting.) He came back to Alaska and married one of my favorite liberals, former Assemblywoman Heather Flynn. Hank fought in the Korean War and survived fighting at the Chosin Reservoir, but was killed in 2003 by a curb-jumping taxi while on vacation in Prague.

So don’t bad-mouth Exxon people around me, friend. Say what you want about Joe Hazelwood and the company’s lawyers, but there are a lot of good people at Exxon. I’ve known many of them.

If Sean Parnell and Tom Irwin don’t smarten up about Point Thomson and drop that stupid lawsuit, I just might say bad things about them.

* * *

I’m a humanitarian kind of guy. For instance, I think we should treat attempted undie-bomber Umar Farouk Abdulmutallab humanely. Police should give him a clean pair of exploding shorts, light his fuse and send him on his way, perhaps into an unoccupied field of clover.

Of course, that won’t happen. The United States is teaching the terrorists about democracy a little at a time. Their latest lesson, for instance, is that when things go wrong, lawyer up and demand your rights as a non-resident attempted mass murderer. Don’t forget to ask the policeman to read you your Miranda rights.

Terrorists also learn quickly that — if things go wrong — they are most likely to become guests of the American government, be sentenced to three nutritious meals a day and a comfortable bed, and given access to exercise equipment and lots of television, movies and other forms of scandalous entertainment. Unless sent back home to attack America again, they will suffer such infidel indignities for the rest of their lives.

I like my way better.


Tom Brennan is author of The Snowflake Rebellion, a tongue-in-cheek novel about Alaska seceding from the union, and three other books. His Website is:

Sunday, January 3, 2010

Russia-Belarus Oil Dispute Threatens Europe’s Supply

MOSCOW — Russia and Belarus have failed to renew an agreement on crude oil export tariffs that expired on New Year’s Eve, raising the prospect that yet another otherwise unremarkable energy pricing dispute between Russia and a neighbor could unravel into a midwinter fuel shut-off on the Continent.

Just a year ago, Europeans shivered through a politically tinged dispute that went on for weeks between Russia and Ukraine over natural gas prices and transit fees.

This year, the crude oil pipeline that is the focus of disagreement is integral to exports of Siberian petroleum to Western Europe as part of the Soviet-era Druzhba pipeline system.

As is the case with natural gas pipelines in Ukraine, about 1.3 million barrels of oil per day shipped along the Belarussian spur of the Druzhba pipeline supply both the internal market in Belarus and the more lucrative markets in the European Union, like Germany and Poland.

On Sunday, Reuters cited two oil traders as saying that Russia had begun curbing supplies to the domestic market by cutting the flows to two refineries, Naftan and Mozyr. In Ukraine last January, that was a first step toward a more general shutdown.

Russian officials took pains to emphasize that the export volumes would continue to flow, while either refusing to confirm or denying the report of a local shut-off in Belarus.

A Russian Ministry of Energy spokeswoman, Irina F. Yesipova, said the transit flow en route to Western markets, a supply big enough that its disruption could raise global oil prices, had not been and would not be halted. She declined to comment on the domestic supplies in Belarus.

A senior official at Transneft, Russia’s state oil transport company, said in a telephone interview that the company continued to supply both the internal Belarussian market and export markets at full volume.

“We have not stopped pumping, not to Belarus, not for export,” said the official, who was not authorized to speak publicly.

A duty officer at the Belarussian Foreign Ministry referred questions to the Ministry of Energy, whose phones were not answered on Sunday.

Belarus is one-half of a loose confederation with Russia that was supposed to eventually lead to a common currency and customs zone. Yet in the oil business, so vital to Russia’s economy, Belarus was treated with privilege but as less than a fully integrated partner.

Refineries in Belarus paid a fraction — 35.6 percent — of Russia’s standard crude oil export tariff. The Belarussians, though, were able to re-export the gasoline, diesel, bitumen and other products to Europe at a healthy profit. This trade helped prop up the government of Aleksandr G. Lukashenko, the Belarussian president, at Russia’s expense.

The oil agreement with Moscow expired Dec. 31. Russia’s deputy prime minister for energy, Igor I. Sechin, had said that lacking a new deal, Belarus should pay the full export tariff on Russian crude, the Russian state RIA news agency reported.

Belarussian officials responded that their country should pay no tariff because it had renewed its commitment to a customs union with Russia just last year, according to a statement posted on the government’s Web site.

Before the New Year, the Belarussian delegation left Moscow, and the government in Belarus posted a statement saying that they had been subjected to “unprecedented pressure” to acquiesce to Russia’s demands. Both sides, however, said Sunday that negotiations were continuing.

Last January, the Russian natural gas monopoly Gazprom first tried to halt supplies to Ukraine’s domestic market in a pricing dispute. It then shut down the pipeline entirely, accusing the Ukrainians of continuing to supply their own needs by siphoning gas intended for export.