Ramras and BP stock: Much ado about ignorance

OPINION: The recent accusations of conflict of interest against Rep. Jay Ramras (R-Fairbanks) by a rabid Palin supporter and host of a pro-Palin website demand a closer look.

According to a blog posting on a pro-Palin website called Conservatives4Palin, and subsequently picked up by both KTUU and the Daily News, Rebecca Mansour -- the website's chief mouthpiece from Los Angeles blogs -- says that, "though Ramras voted in favor of AGIA, he seems keen on praising the rival pipeline. Why would he be undermining AGIA? Is it an honest difference of opinion?"

Mansour goes on to answer her own questions by asserting that because Ramras bought BP stock, he will somehow profit from the failure of AGIA.

"Take a look at page 10 of Ramras' financial disclosure," Mansour writes. "Ramras purchased 3,000 shares of BP on 8/18/08. They were reported to be worth $172,388.95."

Mansour's contention is that Jay Ramras wants AGIA to fail so his shares in BP will increase in value.

Obviously, Mansour is completely unschooled in how the whole natural-gas pipeline project has come together. If AGIA fails, it won't be due to Ramras purchasing 3,000 shares of BP stock. It will be because the terms of AGIA have ignored legal and fiscal realities since the first day Gov. Palin rolled it out.

The bottom line is that the AGIA and Denali gas pipelines are not in a race to see which gets built first. In fact, no pipeline can be built until BP, ConocoPhillips and Exxon ALL AGREE to build and finance it together.

Even TransCanada's CEO has repeatedly stated that the pipeline will not be built without the "agreement and support of the North Slope producers." And that agreement and support won't come until the state puts AGIA aside and addresses the age old question of tax rates and fiscal certainty, which is something AGIA fails to do.

But lets play this out for Mansour, and hopefully educate her while indulging her accusation against Ramras.

On July 22, 2008, Ramras votes against granting the AGIA license to TransCanada arguing that AGIA will not create an economically viable project for the producers.

A week later the State Senate approves the license and TransCanada becomes the state's favored son...even though they've admitted publicly that they can't build the line without BP, Conoco and Exxon agreeing to finance the $30 billion plus pipeline.

On Aug. 18, 2008 Ramras buys 3,000 shares of BP thinking that if AGIA fails then his stock will rise because BP will then push ahead and build the pipeline.

But in order for his stock to rise, BP has to build the pipeline and begin shipping gas.

It's evident that Mansour doesn't realize that in order for BP's stock to increase due to action pertaining to the construction of a natural-gas pipeline, it would first have to be built and prove profitable.

That will require concessions from the Palin administration, which so far they have steadfastly refused.

At the Exxon-TransCanada joint partnership announcement three weeks ago and last week at the Legislature's oil and gas committee hearing, the three major producers clearly stated they can't move the project forward until the state addresses the critical fiscal certainty issue (i.e. taxes).

So, given that BP is not a solo actor in this process, and that the company needs the participation of Conoco and Exxon, as well as fiscal concessions from the Palin administration, the whole premise of Mansour's allegation is absurd.

The only one who benefits from the failure of AGIA is Alaskans, because then, and only then, can we get back to economic reality and sit down to negotiate with the companies that will build the largest and most expensive oil and gas project in the world.

And by the way, why in the hell is Mansour bitching about Ramras anyway?