In the mid-1990s, when Palin was sitting at Wasilla city council meetings, doodling SARAH PALIN MAYOR on the back of a Wasilla budget--or even when she ran for mayor as Sarah Heath Palin, in 1996--Alaska had seemed as big as life. But viewed from the Land of Oz, where she’d been for the past 10 weeks, it looked insignificant, marginal, downright puny. She’d been at the white-hot center. How could she go back to the cold, dark edge?
That she’d come to view her governorship as a distraction from her efforts to project herself onto the national scene became even more obvious later that month when she delivered only perfunctory opening remarks at the annual two-day convention of the Resource Development Council for Alaska. Although that Anchorage gathering brought together representatives from all of Alaska’s leading energy producers and developers, Palin showed no interest. She fondly recalled the days when “there’d be 20, 30, 40, 50, 60,000 people at these rallies, and they’d be chantin’, when I got introduced, ‘Drill, baby, drill.’ ” Then she made a couple of jokes about the expensive clothes she didn’t get to keep and about Tina Fey, stayed for just one panel, and then she was gone. She didn’t hear an Exxon Mobil executive deliver the keynote speech at a luncheon conference called “The Future of North American Gas: Opportunity for Alaska.”
On the second day, she didn’t show up at all. She missed the Federal Update on Alaska Gas Pipeline Projects and presentations by representatives of both TransCanada and the Denali gas line. As the price of oil and gas plummeted, she also missed the afternoon presentation, titled “Financial Crisis and Global Economic Recession: Outlook for Alaska Resource Industries in 2009.” Instead, it being the week before Thanksgiving, she went to a poultry farm in Wasilla to pardon a turkey in time for the 6 o’clock news.
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Nobody I talked to seemed surprised. “She just doesn’t think it’s important to know things,” said Andrew Halcro, the conservative who ran against her for governor in 2006. “Issues register on her brain only in terms of populist appeal. She never thinks through the policy implications.” From the other end of the political spectrum, state representative Les Gara of Anchorage, a liberal, said, “She doesn’t spend time studying problems. She’d much rather deliver a sound bite than do the hard work of governing.”
A few days after the Resource Development Council convention, I met former Governor Knowles for coffee at Side Street Espresso. Anchorage is not a city with many institutions--it’s still too raw and utilitarian for that--but George and Deb’s little coffee shop on G Street, around the corner from the legislative office building, is one. Mismatched chairs, original art and posters on the walls, abundant political opinion--both written and spoken (a liberal stance is preferred but not required)--the best coffee in Alaska, and, most of all, the warmth and good cheer of George and Deb themselves have made Side Street more of a downtown destination than a mere convenience. I’d arranged my meeting with Knowles by looking up his number in the phone book and calling him. People still use phone books in Alaska, and ex-governors are listed alongside everyone else.
Knowles, at 66, is a tall drink of water from Oklahoma. His father and grandfather were wildcatters who hit dry holes their whole lives. Nonetheless, at the age of 16, Knowles went to Yale, from which he was expelled for throwing a water balloon out of a dorm window. He enlisted in the Army and served with an intelligence unit in Vietnam. Readmitted to Yale, he graduated in 1968 as a Delta Kappa Epsilon brother of George W. Bush.
But here’s what happens when you send a third-generation Okie to Yale: He marries a Vassar girl. No place for her in Oklahoma, so they headed for L.A., where Knowles got a job with Loffland Brothers Drilling. Loffland soon sent him to Alaska’s North Slope. Like so many before him--and so many who came after him as well--once he’d seen Alaska, he knew there was no other place he wanted to live. He settled in Anchorage and quickly parlayed a hamburger joint he’d started, called Grizzly Burger, into a 50 percent stake in the Downtown Deli on Fourth Avenue. It was the first New York-style deli in Alaska and the only place in Anchorage where you could buy a copy of the Sunday New York Times. Despite being pro-gay rights and anti-capital punishment, Knowles got himself elected mayor of Anchorage and went on to become governor of Alaska, serving eight years and finally bumping up against the two-term limit in 2002.
“It’s just so puzzling,” he told me, “that the state has gone in the direction of dividing the players instead of trying to bring them together. It dumbfounds me. I’m not sure what point the governor is trying to prove, but everything she’s doing is the opposite of ‘Drill, baby, drill.’ This shouldn’t be about creating enemies or making friends. Emotion shouldn’t be the basis of public policy. What the state should be doing right now is not demonizing, but negotiating with interested parties to try to make something happen that would be good for all concerned. The window of opportunity is closing. This gas-line opportunity is going to pass us by. It’s like we’re sitting here in our log cabin on the frontier, and the wind is howling all around us, and we’re heating ourselves by burning our own furniture.”
In fairness, it should be emphasized that not all Alaskans think AGIA is a half-billion-dollar blunder. There are, for example, the 38 legislators who voted for it last summer (although if the vote were to be taken again, during the current legislative session, the result might be a lot closer than 38-to-21). There are the consultants--supposedly $13 million worth of consultants--hired by the Palin administration to sell AGIA to the legislature. And there is maverick economist Gregg Erickson, founding editor of the Alaska budget report.
I met Erickson for breakfast one morning in Juneau. He wanted to eat at McDonald’s. You know times are tough when the economists opt for fast food. “AGIA,” he told me, “is the most brilliantly executed piece of political and economic strategy I have seen in my lifetime. And I have seen a lot. That doesn’t mean it will succeed, but it has brought the Canadian government onto our side. Now we have an alignment of three of the four key players: the U.S. government, the Canadian government, and the state of Alaska. The fourth player, the producers, are going to have to deal with that reality. The governor deserves enormous credit for her accomplishment.”
Palin breezed into Fairbanks on the morning of December 5 for a ceremony in which AGIA’s license would be officially turned over to TransCanada. Things with TransCanada had already begun to get dicey. Kvisle, TransCanada’s CEO, had recently made some disturbing comments. He’d said, “I don’t know whether we’re going to see [this] get built or not.” He added that the “single most important step” in moving forward would be to have “fruitful discussions” with the producers. Palin had tried so hard to ensure that neither Exxon Mobil nor BP nor ConocoPhillips would have any ownership stake in the pipeline, yet Kvisle saying, “In terms of any ownership role that they may wish to take, we’ve made it very clear that we are willing to accommodate them.”
The governor made no reference to any of Kvisle’s remarks. It was as though she didn’t even know he’d made them. Indeed, she seems to have a remarkable capacity for hearing only what she wants to hear. She may not be “a fucking psychopath,” as one very prominent Alaskan told me she was, but Palin does seem prone to what psychologists call magical thinking. At its most basic level, this is a tendency to believe that you exert more control over events than you actually do. It is the irrational belief that thinking is the same as doing, that you can actually cause a circumstance or an event to occur simply by wishing for it. It is common and natural in young children. Believing that you will become president of the United States someday simply because you want to would be an example of magical thinking. Another example would be believing that you can make a gas line happen, if only you want it badly enough and--as Palin has done--you ask schoolchildren to pray for it. Believing that as governor of Alaska you can bend Exxon Mobil to your will is magical thinking in the extreme.
I came back from Alaska with the sense that the further Palin goes, the more she resembles not Joan of Arc but Eva Perón. In their book Evita, Nicholas Fraser and Marysa Navarro wrote of Perón that “the only people with whom she felt totally at ease were those who accepted what she was doing unconditionally” and that eventually “there was no one left around her capable of criticizing anything she did.”
That seems to be the way Palin wants it. It’s almost as if, long ago, she adopted as a personal motto Mark Twain’s sardonic observation “All you need in this life is ignorance and confidence, and then success is sure.”
Events, however, are not as easily manipulated as people. The price of oil has fallen by more than $100 a barrel since the halcyon days of August, when the Alaskan legislature approved the $500 million payment to TransCanada. The state now faces a 2009 budget deficit of $1.65 billion--four times as much as Palin’s Department of Revenue estimated in December but still only half of what Finance Committee co-chairman Hawker foresees. That $500 million no longer looks quite so much like chump change.
And the pipeline? In her annual State of the State address to the legislature on January 22, Palin saw only clear skies ahead. “In Alaska,” she said, “all roads lead--well, really, we only have the one--north. But it leads to the North Slope and to the central importance of our North American gas line. America’s security, Alaska’s revenue, Alaskan careers, affordable fuel…all these hinge on the success of this great undertaking. I assure you: The line will be built. Gas will flow. Alaska will succeed.”
She made no reference to the irony of putting America’s security and Alaska’s future in the hands of a foreign company. The same day, however, at an oil-service-company conference in Anchorage, a couple of people who seemed to have a firmer grip on reality were not so sanguine.
“It’s certainly going to be taken off the urgent list,” said Ed Kelly, vice president of Houston-based energy consultants Wood Mackenzie. Brian Frank, president of BP, was even gloomier. “It’s not a pretty story right now in terms of North American natural-gas markets. Without stakeholder alignment, it’s difficult to
visualize the project going forward.”
“Stakeholder alignment” means the state of Alaska and the companies that control the natural gas on the North Slope coming to terms, something Palin continues to resist. “How do you know the economics for your project if you don’t know what you’re going to pay in taxes?” Frank asked.
Palin had no answer. She was off to the Alfalfa Club dinner in Washington, and then she was busy endorsing Texas Governor Rick Perry in that state’s Republican gubernatorial primary. As Palin put it, “He walks the walk of a true conservative, and he sticks to his guns. And you know how I feel about guns.” Then she was sending an email to new members of SarahPAC--the political action committee she formed after the election--assuring them that she would maintain her national presence.
The Obama administration may want to prioritize construction of the Alaska natural-gas pipeline. And even in the deteriorating economic climate, the Denali project of BP and ConocoPhillips is moving forward. But TransCanada is hedging its bets, now saying that, in order to proceed, it may need Congress to authorize even more than the $18 billion it has already set aside to reimburse the pipeline builder, should the project fail after construction. “We need to encourage the U.S. government to perhaps increase the size of the loan guarantees,” CEO Kvisle says. Given the staggering sums the government has already committed to propping up failing U.S. companies, a commitment of more billions to a potential future bailout of a Canadian corporation seems about as likely as a sunrise over Prudhoe Bay on Christmas morning.
The bottom line is that for all her posturing, and as much as she might wish it were not so, Palin’s only accomplishment in two years of work on the pipeline project has been to give $500 million from Alaska’s budget to Canadians and to leave Alaska, once again, at the not-so-tender mercies of Big Oil.
And with Palin’s attention shifting several thousand miles to the southeast, Alaskans are starting to catch on. In its January 27 edition, Bradners’ Alaska Legislative Digest, a publication that had long been supportive of Palin, had this to say: “The problem we see is that we continue to see Governor Palin as not really interested in governing, not interested in chasing an issue to the bottom. Further, our assessment is our governor just doesn’t understand the difference between campaigning and governing. We increasingly suspect that Governor Sarah Palin now has a focus that is Washington D.C. beltway politics, and Alaska may pay a price for pandering to interests quite far to the right of center.”
Looks like the great white whale wins again.
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