July 9, 2009 / 1:54 AM / 10 years ago

Palin successor vows continuity in Alaska energy

ANCHORAGE, Alaska (Reuters) - The man who will take over as Alaska’s governor later this month has extensive experience in oil and gas, but is telling the industry and corporate investors that policies will not change even as the face at the top does.

A video frame grab shows former U.S. Republican Alaska Governor Sarah Palin speaking with Lt. Gov. Sean Parnell (R) after announcing that she will resign this month and will not run for re-election as governor in Wasilla, Alaska, July 3, 2009. REUTERS/KTUU-TV

Lt. Gov. Sean Parnell, a 46-year-old Republican, will be sworn in as governor when Sarah Palin steps down on July 26 after her surprising resignation announcement last Friday.

“Bottom line, this was the Palin-Parnell administration. I intend to continue the core values and the overarching philosophy that guided it,” Parnell told Reuters in a telephone interview on Wednesday.

That means pipeline projects will remain on course and oil taxes will not be altered despite industry complaints that the current regime is punitive.

Parnell said that when Palin told him of her plans to step down he was “surprised at the time.” But he refuses to shed light on the motives of the 2008 Republican vice-presidential candidate who thrust Alaska into the national spotlight.

While speculation swirls that Palin is angling for national office again, Parnell emphasizes that his “focus is on Alaska.”

Since Friday, Parnell has been calling legislators and “will be reaching out to the oil and gas industry,” as well as the mining industry and other industries to assure them that Alaska has a stable investment climate.

On efforts to secure a massive North Slope natural gas pipeline, a mega-project sought by Alaskans for decades, Parnell said he will “follow through” with the Alaska Gasoline Inducement Act (AGIA), the Palin-sponsored law that established a competitive bidding process

The law resulted in a state license being granted to TransCanada Corp., which last month announced a partnership with Exxon Mobil, one of the three major North Slope oil producers and holders of leases to known natural gas.

The other two major oil producers and natural gas leaseholders, BP and ConocoPhillips, are pursuing a separate project, called Denali, under a partnership formed outside of AGIA.

Parnell said it will ultimately be up to the private sector to determine which pipeline plan succeeds.

“The state of the gasline project is such that you have now two credible projects with credible partners,” he said.

TAX FREEZE TALK PREMATURE

There are no plans to grant what oil producers have termed “fiscal certainty” on natural gas production taxes, meaning a long-term lock-in of rates. The three major oil producers have declared such “certainty” is needed to reduce financial risks of building a massive natural gas pipeline.

Parnell said any discussion of a particular tax freeze is premature.

“Until there’s a project in sight and companies can bring forward facts demonstrating the need for that, I don’t see that happening,” he said.

Likewise, Parnell said he has no intention of altering oil taxes, even though producers have complained that the new system put into place by Palin and the legislature is punitive.

“It’s very important that the state maintain a stable investment climate, so I don’t plan any changes to the oil-tax regime,” he said.

One decision that reflects Parnell’s desire for continuity is his request that all of Palin’s cabinet members and her chief of staff remain on the job.

Still, some things are bound to be different.

Unlike Palin, Parnell has state legislative experience. The son of a former legislator, he served two terms in the state House and a term in the Senate, a period spanning from 1992 to 2000, representing a district in south Anchorage.

His service included a stint as chairman of the powerful Senate Finance Committee, which he said was a difficult job at a time of rock-bottom oil prices and yawning budget deficits. Alaska traditionally relies on oil earnings for 70 percent to 90 percent of its general government revenues.

Parnell also served as deputy director of the state Division of Oil and Gas for Gov. Frank Murkowski, the Republican who preceded Palin. He has also worked as an attorney, representing oil companies among other clients.

Editing by Mary Milliken and Ben Tan

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