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Palin's pipeline - less than meets the eye

By Alexander Lane September 15, 2008

SUMMARY: On the campaign trail, it's a central part of her campaign speech to demonstrate a get-it-done record of accomplishment. But the enormous pipeline Sarah Palin touts is nowhere near as far along as her rhetoric suggests.

In Alaska, Gov. Sarah Palin's work on a new natural gas pipeline is as big a part of her resume as any other single issue.

Now she is using it to shape her persona as Sen. John McCain's vice-presidential candidate. She has cited her work on the pipeline as evidence of her ability to stand up to big oil companies, promote energy independence and just generally get things done.

"I fought to bring about the largest private-sector infrastructure project in North American history," Palin said in her speech at the Republican National Convention on Sept. 3, 2008, and in a radio address three days later.

"We began a nearly $40-billion natural gas pipeline to help lead America to energy independence."

She returned to the matter in a speech in Virginia on Sept. 10, 2008: "Through competition as governor, I got agreements to build a nearly $40-billion natural gas pipeline," she told the crowd.

That all sounds quite impressive. But it's not true that Palin got an agreement to build the pipeline, as we explain here . Nor does the evidence support the claim that it would cost $40-billion and be the largest private-sector infrastructure project in North American history, as we explain here .

So let's take a broad look at this pipeline project, and what Palin did and did not do to bring it about.

Alaska's North Slope, a rugged region along the Brooks Range Mountains in the far north of the state, holds an enormous amount of natural gas. But there's no good way to get it to market. Alaskan officials and oil companies have been trying to solve that problem for some three decades, and governor after governor has pushed for the building of a pipeline.

Palin's plan is for the Canadian company TransCanada Corp. to build a line southeast along the Alaska Highway, through the Canadian province of British Columbia to a pipeline hub in Alberta.

Before her election as governor, Palin opposed the idea of routing the pipeline through Canada, a version of which her predecessor, Frank Murkowski, had advocated. Instead she pushed for what she and other proponents called an "all-Alaska" pipeline — one that would go to the Alaskan port city of Valdez, from which the gas could be shipped to market.

She even appeared in advertisements endorsing the all-Alaska option, and on the wall of her gubernatorial campaign headquarters in 2006 was a sign saying, "Canada my ass, it's Alaska's gas."

The Alaskan Independence Party, a controversial group of which Palin's husband was a member for almost seven years ending in 2002, helped popularize that rallying cry in Alaska. Appearing in the advertisements with Palin was former Gov. Wally Hickel, who won his second gubernatorial term as the Alaskan Independence Party candidate in 1990, but later switched back to the Republican Party.

After she was elected governor, Palin expressed a willingness to consider all options, as long as there was competition for the project. She pressed the Legislature to pass the Alaska Gasline Inducement Act, known as AGIA, which provided $500-million in state funds to whichever company offered the best proposal for the project.

The Alaska State Legislature accepted TransCanada's proposal in a bill Palin signed on Aug. 27, 2008. That allows her administration to give the company a license 91 days later, according to TransCanada spokeswoman Cecily Dobson, after which time the company would face the multiyear process of seeking federal approval.

In several instances, Palin has characterized the arrangement with TransCanada as an "agreement to build" the pipeline. Other times she has said "we (meaning she and her team) began" the pipeline.

TransCanada has begun planning the pipeline, but it has not started construction, and it will not do so any time soon, if ever.

According to the Web site Palin's office maintains on the AGIA project: "TransCanada's application states that it anticipates filing for Federal Energy Regulatory Commission approval at the end of 2011 ... allowing pre-construction activities to begin in 2013. In its proposal, construction of the pipeline would begin in 2015."

Furthermore, the entire plan depends on TransCanada getting all the necessary approvals and financing, which is far from certain. And even if those come through, the company can still back out.

The agreement "is not a construction contract and does not guarantee a pipeline will be built," as the Anchorage Daily News put it on Aug. 2, 2008.

Several experts we spoke to were skeptical that TransCanada's plan would come to fruition.

"I'll believe it when I see it," said Sarah Ladislaw, a fellow specializing in Western Hemispheric energy issues at the Center for Strategic & International Studies.

It's also worth considering whether Palin's pipeline proposal would, as she frequently claims, "Help lead America to energy independence."

It would be constructed by a Canadian company and run through Canada. Critics of the plan in Alaska have seized on this, framing it as an issue of state and national pride. That said, experts said if there's one country we shouldn't shy away from depending on, it's Canada.

"Honestly if we are concerned about Canada, where most of our gas imports already come from, then there is no hope for this country," said Edward Chow, a senior fellow specializing in the oil and gas industry at the Center for Strategic & International Studies.

So there's a lot to say for the idea of a natural-gas pipeline of the sort Palin proposed. But she didn't dream up the idea, and she didn't get construction started, as she frequently implies. Alaskan officials and oilmen have seen their hopes for a pipeline dashed for decades; Palin might simply be the latest in that long line.

She ought to ratchet back the boasts if she's interested in sticking to the truth.


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Our Sources, VP Nominee Sarah Palin Delivers Campaign Weekly Radio Address , Sept. 6, 2008, accessed Sept. 10, 2008

Alaska Governor's Office, Palin Signs AGIA License Bill , Aug. 27, 2008, accessed Sept. 10, 2008

Alaska Governor's Office, Frequently Asked Questions Regarding the Alaska Gasline Inducement Act and the AGIA Process , accessed Sept. 10, 2008

Alaska Department of Natural Resources, Executive Summary of AGIA , March 5, 2007, accessed Sept. 8, 2008

Alaska Independence Party, Questions and Answers About Alaskan Independence , accessed Sept. 9, 2008

Foster Natural Gas Report, Alaska Governor Offers Inducements to Build Gas Line in Exchange for Meeting Benchmarks, March 9, 2007

Anchorage Daily News, TransCanada Gets Senate's OK , Aug. 2, 2008, accessed Sept. 10, 2008

Anchorage Daily News, Rebel Status Has Fueled Front-Runner's Success , Oct. 24, 2006, accessed Sept. 10, 2008

Anchorage Daily News, Candidate Palin Casts Herself as a Republican Party Iconoclast , Aug. 11, 2006, accessed Sept. 10, 2008

Boston Globe, Parties Jockey to Guide Flood of Data About Palin , Sept. 10, 2008

Alyeska Pipeline, Pipeline Facts , accessed Sept. 9, 2008

Interview with Alaksa State Sen. Bill Wielechowski, Sept. 8, 2008

Interview with Alaska State Sen. Lyda Green, Sept. 8, 2008

Interview with Sarah Ladislaw, fellow, Energy and National Security Program, Center for Strategic & International Studies, Sept. 9, 2008

Interview with Edward Chow, senior fellow, Energy and National Security Program, Center for Strategic & International Studies, Sept. 9, 2008

Interview with Scott Lewis, editorial research director, Engineering News-Record, Sept. 9, 2008

Interview with Jay McCauley, vice president, Society for Industrial Archeology, Sept. 9, 2008

E-mail interview with Cecily Dobson, spokeswoman for TransCanada Corp., Sept. 9, 2008

Bureau of Labor Statistics, Inflation Calculator , accessed Sept. 9, 2008, Tom's Inflation Calculator , accessed Sept. 9, 2008, The Inflation Calculator , accessed Sept. 9, 2008


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Palin's pipeline - less than meets the eye