Meanwhile, Back in Alaska

As Sarah Palin hits the ground running and renews work to bring stranded energy to market, savvy observers look to the future.

Evan as the gloom of a now-official recession sets in and the memory of a sometimes bitter presidential election fades, important work is being done that potentially will set the table for a robust economy in the not-too-distant future. Americans have notoriously short memories when it comes to what ails them, and there is no more perfect example of that metric than the price of gasoline. Peaking at well over $4.00 per gallon this fall, retail regular unleaded gasoline has fallen to as little as $1.70 per gallon. As usual, the easing of energy pricing has taken the American consumer’s eye off the ball. Fortunately, Alaska Governor Sarah Palin hasn’t forgotten what her constituents elected her to do.

Alaska’s governor last week was finalizing the details of a state license to TransCanada in preparation for a proposed natural gas pipeline from the North Slope to Alberta. As the oil majors continue to drag their feet on the leases that they have held for decades, Palin says that the gas line will work without Point Thompson resources. And, while critics of the gasline strategy say the producers won't commit to shipping gas down a pipe they don't own, Palin answers by saying, “They knew what was coming.” Today, it is no accident that Exxon and a myriad of other companies that have held natural gas leases for decades are finally making overt moves to develop those resources. Had they done so sooner, they might be the ones building the pipeline. In the end, they’ll have to participate – or someone else will, in their place.

Back in Washington, the President, federal legislators and the Obama transition team wring their hands about what to do with the train wreck known as the Detroit automakers. But without firm stipulations on the way Detroit does business in the future – including the development of energy-efficient vehicles – the proposed bailout plan will involve nothing more than sending good money after bad. In the end, it all comes down to failed domestic energy policy; something that’s not likely to be fixed any time soon. Sadly, it is domestic energy which can and should bring us out of the current fiscal malaise, but don’t count on it.

As Sarah Palin works to liberate domestic energy from Alaska, Washington prepares for a Democrat-led Congress and a President who campaigned from the left but appears to be destined to govern from the middle. What all of that means for offshore energy exploration and drilling is anyone’s guess, but if the Bush Administration couldn’t get the job done back in 2002 with a moderate GOP mandate, what chance is there that meaningful progress can be made in the next two years?

Sarah Palin left the lower 48 on November 4th with somewhat of a black eye. Although wildly popular with the far right of the Republican party, she was painted by the media in general as, at best, a zealot with questionable knowledge of the issues, and at worst, the cause of the GOP collapse. In this column, I opined in so many words, a few months ago, that Palin might be best placed in her current role as Governor of Alaska. Her efforts to hold the oil majors’ feet to the fire when it comes to holding up their end of the bargain are just beginning to yield fruit. And, while no one can know what the future holds, you can be sure that when energy does start flowing down that pipeline, it will have occurred a couple of decades sooner than it would have happened, without her in the driver’s seat.

With Palin’s kind of leadership in Washington, there is no telling where we would be in terms of offshore energy development. For the short term, we will have to be satisfied with progress in Alaska on that front. She may yet fail in her quest. But, what if she doesn’t? Four years is an eternity in any political cycle. Imagine, if you will, the spring of 2012: A gas pipeline is finally under construction in Alaska. A spurline to Valdez to facilitate a maritime route to the lower 48 is even being planned. The development has helped to bolster a slowly recovering economy, reduced a bloated trade deficit and created thousands of jobs and markedly increased federal tax receipts. The ongoing effort promises more of the same for decades to come. I’m betting, at this point, that no one will care how much money the RNC spent on Sarah Palin’s wardrobe in 2008. Food for thought. –MarEx.

Joseph Keefe is the Managing Editor of THE MARITIME EXECUTIVE. He will be on holiday for the next ten days, with limited access to E-mail. He can be reached at [email protected] with questions about this or any other aspect of this e-newsletter.