A legal controversy โ critics would say scandalย โย has erupted in Alaska’s statehouse over the future of its natural gasย bounty.
It’s not so much an issue of the gas itself, but who gets to decide how it gets to market and where he or sheย resides.
The question of who owns Alaska’s natural gas and whereย they’re from, at least for now, has been off the table. More on thatย later.
At its core, the controversy centers around a public-private entity called the Alaska Gasline Development Corporation (AGDC) created on April 18, 2010 viaย House Bill 369ย for the โpurpose of planning, constructing, and financing in-state natural gas pipeline projects.โ AGDC has a $400 million budget funded byย taxpayers.ย
AGDC was intially built to facilitate opening up the jointly-owned ExxonMobil-TransCanada Alaska Pipeline Project for business. That project was set to be both a liquefied natural gasย (LNG) export pipeline coupled with a pipeline set to bring Alaskan gas to the Lower 48. ย ย ย
Photo Credit: TransCanada
Things have changed drastically since 2010 in the U.S. gas market though, largely due to theย hydraulic fracturing (โfrackingโ)ย boom. And with that,ย the Lower 48 segment of the Alaska Pipeline Project has become essentiallyย obsolete.
Dreams of exporting massive amounts of Alaskan LNG to Asia, however, still remain. They were made much easier on April 14, when the Kenai LNG export facility received authorization to export gas from the U.S. Department of Energy.
Enter the latest iteration of AGDC. This phase began in January 2014 after Governor Sean Parnell,ย formerly a lobbyist for ConocoPhillips,ย signedย Senate Bill 138 intoย law.ย
The bill served as a Memorandum of Understanding (MOU) between Alaska, the AGDC, ConocoPhillips, BP, ExxonMobil, and TransCanada, with the four companies now serving as co-owners of the South Central LNG Pipeline Project.
Gov. Parnell also announced who would serve on the AGDC Board of Directors in September 2013, which began meeting in October 2013.ย And that’s where the story starts to get moreย interesting.ย
Meet Richard โDickโย Rabinow
Under Alaska state law,ย you have to be a state citizenย to serve on state commissions like AGDC. But one of the seven Board members, Richard โDickโ Rabinow, is a citizen of a state far from Alaska:ย Texas.ย
Richard โDickโ Rabinow; Photo Credit: Alaska Gasline Developmentย Corporation
Rabinow is the former president of ExxonMobil Pipeline Companyย (where he worked for 34 years) and former Chairman of theย Trans Alaska Pipeline Systemย (TAPS) Owners Committee. TAPS is co-owned by ExxonMobil, BP, Unocal and ConocoPhillips. He currently lives in Dallas, Texas and runs his own consultancy called Rabinow Consortium, LLC.
Because Rabinow isn’t an Alaskan, major backlash ensued when watchdogs discovered he’s from Texas, which nearly caused him to step down from AGDC‘s Board.ย Alaska’s Senate Democrats wrote a letter on March 21 calling on Rabinow to step down because his appointment flew in the face of stateย law.ย
โMr. Rabinow is a resident of the state of Texas. Mr. Rabinow is not registered to vote in the state of Alaska. Mr. Rabinow is not qualified to serve as a board appointee here,โ read the letter. โ[O]ut of respect for the law, we demand that you withdraw Mr. Rabinowโsย appointment.โ
Importantly, only four members of the 20-member Senate areย Democrats.
So just three weeks after the Senate Democrats wrote their letter, the Senate passedย HB 383 in a 13-7 vote, which also passed in the House in a 27-12ย vote.
Immediately signedย by Gov. Parnell on April 16, the law now says that AGDC Board members are โnot required to be a registered voter or a resident of theย state.โ
Democratic House Leaderย Rep. Christ Tuckย was none too pleased with the bill’sย passage.
Rep. Christ Tuck; Photo Credit: The Alaska Stateย Legislature
โAlaskans are tired of multinational corporations coming up here and our government catering to them at the expense of Alaskans,โ Tuck told the Alaska Dispatch.ย
Multinational corporations in general are oneย thing.
But in the case of Rabinow’s former employerย ExxonMobilย โ coined a โprivate empireโ by investigative journalist Steve Collย โ it also has ties in Alaska to anย out-of-country multinational corporation from Russia:ย Rosneft.ย
ExxonMobil: โFrom Russia withย Loveโ
In February 2013, ExxonMobil offered Russian state-owned oil and gas company Rosneft a 25-percent stake in its portion of the Point Thomson oil and gasย field.ย
Located on Alaskaโs North Slope, whichย contains both onshore and offshore oil and gas, Point Thomsonย containsย 25 percent of the known North Slope gas reserves.
Point Thomson Oil and Gas Field; Map Credit:ย Alaska Department of Naturalย Resources
โThe agreements signed today bring the already unprecedented scale of Rosneft and ExxonMobil partnership to a completely new level,โ Igor Sechin, President of Rosneft said of the deal in a press release at the time. โParticipation in the Point Thomson project will increase Rosneftโs access to the latest gas and condensate field development technologies used in harsh climaticย conditions.โ
Stephen Greenlee, President of ExxonMobil Exploration Company (L); Russian President Vladimir Putin (C);ย Igor Sechin, President of Rosneft (R); Photo Credit: Rosneft
Sechin is thought to be high up on the list of potential persons to face sanctions by the U.S. for Russia’s ongoing occupation of Crimea in Ukraine. Easier said than done, of course, given the ties that bind U.S. companies to Russia’s oil and gasย industry.ย
โ[I]f anyone apart from Sechin himself is anxious about the prospect of his arrest if he travels to the West, it could be oil companies like BP and ExxonMobil,โ wrote investigative reporter Steve Levineย recently. โIn other words, the US will be going after Sechin, but also a house that the West itself helped toย build.โ
Given this wheeling and dealing and geopolitical wrangling between the U.S. and Russia resembles something straight out of a James Bond film, perhaps it’s only appropriate that one of the most famous Bond flicks is titled, โFrom Russia with Love.โ
In this ongoing โGreat Game,โ the controversy that erupted over Rabinow’s appointment appears minor byย comparison.ย
Photo Credit: Wikimediaย Commons
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