Exxon's problem--I was intrigued by one national news story that recently noted Exxon has a "cash" problem--the company doesn't know what to do with all the cash generated by crude prices above $50 per barrel. The story noted company coffers could total $40 billion in the near future. My suggestion is they pay off their court-ordered debt to Alaskans resulting from the Exxon Valdez spill. That takes care of over $7 billion of Exxon's troublesome cash 'problem' (the federal court-ordered $4.5 billion in punitive damages and there is $2.25 billion in accrued interest over the 16 years plus $287 million in actual damages to Alaskans). Hey, if they were really generous, Exxon could build the $20 billion Alaska Highway gas pipeline, pay off their court-ordered debt, and still have $13 billion left of their cash 'problem'.

Oil windfall--Two different studies, one by the state's department of revenue and the other by an outside analyst, show oil companies operating in Alaska made more than $5 billion pumping our oil, oil owned in common by Alaskans, over the past year. The state got $3.04 billion. A $50,000 study purchased by the state recently said Alaska is one of the more profitable oil regions and that the government share, our share, of oil and gas profits is significantly below average. Oil industry folks counter that Alaska is one of the more expensive places to operate.

Not all that funny but in a bi-partisan spirit--I was out of town for meetings for the last few days so Marylou had to call long distance to pass on the gist of a joke she heard on Saturday's Prairie Home Companion. A doctor delivered some somber news to relatives gathered at the hospital: the patient, he said, "showed no brain activity but the heart was pumping steadily." One of the relatives responded "that is bad news doctor, we've never had a Democrat in the family before."

Book reports--There's a hefty line-up of books by neighbors published by major publishing houses this summer. We've just finished reading Heather Lende's book If You Lived Here, I'd Know Your Name (Algonquin Books). Marylou said we're not putting the Haines writer's book away, we're just putting it aside so we can read it to each other in a few months. It's that good. I'm now almost done with Juneau author Lynn Schooler's book The Last Shot: The Incredible Story of the C.S.S. Shenandoah and the True Conclusion of the American Civil War (HarperCollins). Another great read, this one about how the Civil War came to Alaska. Next on my reading agenda is a book sitting by my armchair written by Nick Jans, another Juneau author. The Grizzly Maze is subtitled "Timothy Treadwell's Fatal Obsession With Alaskan Bears." It's the story of a controversial "bear whisperer" pushing nature's envelope with deadly results and is published by Penguin Books. Coming up: Alaska State Senator Fred Dyson told me last week his daughter's first novel garnered a huge advance from a New York publisher and is set for release in November. It's about a murder club in Dutch Harbor.

Phone: (907) 465-4947
Fax: (907) 465-2108
Mail: Sen. Elton, State Capitol
Juneau, AK 99801
Email:
Senator.Kim.Elton
Jesse.Kiehl
Paula.Cadiente
Web: http://elton.akdemocrats.org

(The following article is reprinted with the consent of former Governor Wally Hickel. It's an excerpt of a speech he gave to the Anchorage Chamber of Commerce a few weeks ago and the excerpt was first published in the Anchorage Daily News. While I suspect there are extraordinary hurdles for the all-Alaska gas line, his perspective should not be simply dismissed--especially since the highway route remains so elusive.)

     We have before us the most important Alaska issue facing this generation: how the vast resources of natural gas at the North Slope will provide maximum benefit to the people of our state.
     It's a classic Alaska conflict - Outside interests versus what's best for Alaska. That is why my generation, 50 years ago, fought for and won statehood.
     What is today's generation going to do? Will you stand by as Alaska sinks back into colonial status? I hope not, because you, too, can write your names in our history books by keeping us independent and strong.
     The Board of Exxon Corporation is said to require management to generate 18 per cent return on their investments. That doesn't make them our enemy. But it also doesn't mean they have the right to run our state.
     Exxon has made billions in Alaska. So have BP, ARCO, and now Conoco Phillips. These resources were not granted to them by Congress. They were granted to the State of Alaska so that we could become a viable state. We, the people, own them in common.
     The oil industry has made an outstanding contribution to modern Alaska, and we have used our revenues to improve our quality of life. That was what Congress intended with the Alaska Statehood Act.
     But, as Alaskans, we must ask ourselves, have we truly used our North Slope oil legacy to build a sustainable economy? For example, most of Alaska's oil is exported by tankers to the South 48 without value added processing. 
     Someone has to make it happen. In 1967, the companies exploring the Slope were talking about pulling out. There was only one left - Atlantic Richfield. I flew to Prudhoe with Harry Jamison, their top exploration geologist.
     When Harry told me his company might pull out. I said, "Harry, you drill or I will." He said, "You mean you will!" I said, "Damn right I will." I wasn't bluffing. I knew it was up to the Governor to stand up for our people and their interests. By early 1968 Atlantic Richfield had discovered the largest oil discovery in the history of North America. 
     Today, we are faced with a similar challenge. Who is going to decide how our North Slope natural gas gets to market? And who benefits? It's a matter of political will.
     The Alaska Gasline Port Authority plans to build an all-Alaska pipeline and export LNG from Valdez to the US West Coast. Last month, they made an offer to buy 3.5 trillion cubic feet of gas a day from the producers at a reasonable price. The producers refused to sell. 
     Was this because they truly intend to build a line of their own, or do they want to keep Alaska's natural gas out of the market? They have never made a commitment to build a pipeline nor announced a specific timetable.
     But North Slope leases mandate that the leaseholders develop and market North Slope gas if and when they have a "reasonable expectation of profit." 
     When the producers refused to sell, the State should have stepped in. But the state did nothing. And Sempra Energy, the Port Authority's partner, frustrated with the lack of leadership from the State, withdrew until Alaska gets its act together. 
     What should we do? We should demand that the producers sell, or in the name of the Alaska people, we should take back that gas that we all own in common. 
     I am not interested in criticizing Governor Frank Murkowski, but on this one, he is being out-maneuvered by the producers. And it's not too late for him to change course. 
     If the producers want a legal battle, let's have at it. But it won't come to that. The court of public opinion is on our side. When the American consumers and the US Congress learn that Exxon or any company is blockading Alaska natural gas from the rest of America, they won't stand for it. All we need is the guts to take a stand.

Walter J. Hickel served as governor of Alaska from 1966 to 1968 and 1990 to 1994 and as US secretary of the interior from 1969 to 1970. Founder of the Institute of the North, his latest book is "Crisis in the Commons: the Alaska Solution."