House Passes AGIA
In a vote of 24-16 the Alaska House of Representatives passed AGIA and in doing so handed exclusive rights and a $500 million subsidy to TransCanada to try and gain federal certification to build a natural gas pipeline.
The debate lasted for hours with many speeches bordering on a complete lack of sensibility.
Rep. Bob Lynn gave a twenty minute rambling speech in support of AGIA where he condemned the producers for slick advertisements and then minutes later lamented the lack of slick advertisements from TransCanada. He went on claim that AGIA will provide an open access pipeline when FERC has already said that anyone who builds the pipeline will have an open access as the law requires it.
Rep Mike Hawker invoked the image of John Galt. "Can government change the laws of economics and nature" Hawker asked.
"We are not going to dictate the projects economics to the market" Hawker warned his colleagues.
"I have a feeling that AGIA is going to stand for Alaska Goofs It Again."
Rep. Wes Keller claimed that the terms of AGIA were open to all parties which was an incredibly disingenuous statement. Those who have watched this process know that it was specifically written to exclude the North Slope producers, which is evident by the fact that none of them bid. He went on to say that the project would be driven by market forces, which ignores the fact that AGIA tries to dictate market forces as pointed out by Rep. Hawker.
Rep. Bob Roses made one of the most compelling speeches of the evening.
"I made a big mistake in voting for AGIA last year" he said before going into a laundry list of concerns that will have tremendous impacts on the legislatures ability to manage AGIA in the future. "We've given away our rights as a legislature" Roses said, pointing out that future legislatures will have no ability to negotiate better terms.
Rep. Paul Seaton offered more of the same baseless arguments in support of AGIA bringing into play the ridiculous duty to produce argument by claiming that with TransCanada is willing to build the line.
Of course Seaton should know that TransCanada can't build the line without the producers agreeing to pay for it and the producers have already stated they will not commit gas under AGIA.
In addition, Seaton called AGIA the way to a basin opening pipeline even though federal regulators have already testified twice that this pipeline will be a basin opening pipeline no matter who builds it.
Finally it was Rep. Ralph Samuels who invoked the great Alaska Seafood plant, ALPETCO and the grain silos as clear lessons from history that government cannot pick a private sector winner. "Government interjecting itself into markets has been a colossal failure, a colossal failure, a colossal failure.
But to show you the absurdity and questionable process that AGIA has become, you need to look no further than an amendment proposed by Rep. Ralph Samuels.
Samuels proposed an amendment that would have prohibited releasing any of the state's $500 million to TransCanada until they publicly released their 2004 gas pipeline proposal they have demanded be kept secret. Samuels held up a sealed envelope and asked his colleagues to vote to unseal the envelope. The amendement failed 23-17.
Why would any lawmaker in a day and age of openness and transparency not support such an amendment?
Next the bill goes to the Senate where it will be voted on next week, but I anticipate the same result.
AGIA will pass and become law, in two years TransCanada will have a failed open season and then the fun begins. Lets just hope AGIA supporters are still around to be responsible for their vote.
