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Palin Mistakes on Energy Issues
In Going Rogue Raise Questions
About Her Capacity to Govern

Review of Palin's Claims on Oil and Gas
. . . Unmasks Alaska's Former Governor
. . . . . . As a Maiden of Misinformation

By Richard A. Fineberg
December 21, 2009
(Revised Dec. 22, 2009)

As Sarah Palin's Going Rogue sales sail past the million mark and critics cackle over its many mistakes, two unreported misstatements about Alaska petroleum development form book-ends for her recently-published autobiography. The first occurs at the start, the other at the very end. Together, they add fuel to this question: Is Palin plagued by an astonishing inability to distinguish fact from fiction, an appalling disregard for truth and accuracy, or both? The book-ends further damage Palin's claim to energy expertise - a pretense she has frequently undermined since she ascending the national stage in 2008. The latest mistakes to surface also open the door to a new closet of energy skeletons from her tenure as governor that she failed to mention in recounting her political life.

In the opening pages of Going Rogue: An American Life, Palin tells readers that construction on the Trans-Alaska Pipeline project (TAPS) "began in 1975" and when oil began flowing in 1977 the "[t]he state raked in more revenue than anyone could have imagined - billions of dollars almost overnight." (1) Palin got key dates of the centerpiece of recent Alaska history wrong. In fact, TAPS construction project began in 1974. (2) Moreover, state records show that Alaska's annual revenue from petroleum operations did not exceed a billion dollars until 1980 - six years after TAPS construction began. (3)

In view of her claim to be "a free-market capitalist . . . (who) understood the bottom line for the oil producers," (4) Palin's failure to recognize the time lag between investment in Alaska oil development and first pay-out is surprising. Moreover, her typically sloppy rendition of this piece of history distorts reality, providing a faulty basis for formulating public policy. For example: Palin's inaccurate claim that oil drilling produced billions of dollars for Alaska overnight lends erroneous support to her gung-ho advocacy of petroleum exploration and drilling in remote areas of northern Alaska. (Other misinformation Palin uses to support aggressive Arctic drilling is summarized in a recent post on this web site, which appears below.)

Four hundred pages after her shaky start, Palin closes Going Rogue with an e-mail note from a misinformed Alaska admirer that tells readers - erroneously - that she "constructed and enacted a new system of splitting the oil profits called 'ACES,' which was responsible for Alaskans elevating their economic status "from being merely wealthy to being filthy rich." (5) While there's nothing new about misinformation on the Internet, when myth and misinformation start creeping into the psyches of large groups of citizens, it's time to set the record straight: The most one might credit Palin for in this case is the act of convening a special state legislative session in late 2007 to deal with oil production tax issues. The bill she presented, which she dubbed ACES ("Alaska's Clear and Equitable Share"), was not an "entirely new way of calculating Alaska's share," as she would have readers believe. (6) Rather, Palin's ACES proposal merely fine-tuned the new, cost-based production tax system enacted by her predecessors the year before she arrived on the scene as governor. (7) Nor is the claim that Palin's work made Alaska "filthy rich" based on facts. According to a detailed analysis of the ACES legislation in the Oil & Gas Journal, as oil prices soared during the first year the ACES legislation was in place, the Palin modifications accounted for less than four percent of the state's total petroleum revenue. (8) In fact, a much larger share of the gains realized that year resulted from the Legislature's rejection and reversal of key elements of the Palin's ACES proposal.

Why would someone choose to end an autobiography with information that simply isn't true? Here is how Palin introduced the post-script to Going Rogue: "A friend forwarded to me a widely circulated e-mail that describes one ordinary citizen's view of my governorship. It is so Alaska - I had to share. I hope you get a good laugh as well." (9) While the obscure humor of the Palin post-script escapes me, the misinformation she presented prompts this troubling question: Is Palin deliberately perpetrating myths about her performance as governor?

I joined Palin's ACES team as a consultant in August 2007 with high hopes that were gradually but inexorably deflated. I had entered Palin World, a frenetic and topsy-turvy bureaucratic universe where slick phrases and inaccurate statements all too often pinch-hit for reality. In addition to providing insight into Palin's self-serving inaccuracies and distortions, I also report on a measure that I helped develop for the Palin team that would have enhanced the state's ability to deal with oil pipeline tariff overcharges, thereby stimulating competition while generating additional revenue for the state during the bill's first year. I was pleased that legislators enacted this measure as part of the ACES bill, but the Palin administration's subsequent attempts to write the necessary regulations turned out to be a dismal failure; the necessary implementing regulations have yet to be adopted - another example of a bureaucratic fiasco that Palin ignored while governing, then left behind.

(To read more on ACES in Palin World, click here.)
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Endnotes

(1) Sarah Palin, Going Rogue (Harper Collins, 2009), pp. 3-4.

(2) Alyeska Pipeline Service Company, The Facts (Alyeska, 2007), p. 2 and "Pipeline Facts" (http://www.alyeska-pipe.com/Pipelinefacts/PipelineConstruction.html).

(3) State petroleum revenue totals include tax and royalties the state deposits in its general fund, as well as dedicated funds deposited in the Alaska Permanent Fund. (See: Alaska Department of Revenue, Fall 2008 Revenue Sources Book, pp. 31, 33 and Alaska Permanent Fund, An Alaskan's Guide to the Permanent Fund, September 1995, pp. 6, 9.)

(4) Going Rogue, pp. 125-126.

(5) Dewey Whetsell, "A View from Alaska," in Going Rogue, p. 406

(6) "[E]ntirely new . . . share" is Palin's phrase in Going Rogue, p. 163.

(7) In August 2006, after a long deliberation during the regular legislative session, followed by three special sessions, the Legislature enacted a shift from a price-based production tax (based on the price of oil, less the cost of transportation to market) to a cost-based production tax (based on the price of oil less the cost of production and the cost of transportation to market; sometimes referred to as a profits-based or net profits tax). For the 2006 statute itself, see: Alaska State Legislature, 24th Session, (Chapter 2, TSSLA 06; SCS CSHB 3001). For a summary of key provisions see: Cherie Nienhuis and Mark Edwards (Economists, Alaska Dept. of Revenue), "Alaska Department of Revenue: A primer on the state's new petroleum production tax system," Petroleum News, April 22, 2007 (Acc 091208 at http://www.petroleumnews.com/pnads/777055166.shtml).

(8) Dan E. Dickinson and David A. Wood, "Alaskan tax reform: Intent met with oil," Oil & Gas Journal, May 25, 2009, pp. 24-25 (Table 2, "2008 Production Tax Revenues: Actual vs. Potential Under Alternative Mechanisms" [Col. 4, Item 4 - Item 3]).

(9) Going Rogue, p. 405.
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.

At this web site you will find fact-based information and commentary about economic and environmental aspects of oil industry operations in Alaska, with special emphasis on the North Slope oil fields and the Trans-Alaska Pipeline System (TAPS). Due to the oil industry's power, political clout and media skills, much of the information you will find here is not widely reported or readily available elsewhere. (Continued below.)
_________________________________________. ._

Commentary

Alaska Under
A Rogue Star

Sarah Palin's Book Tour
And the Mess
She Left Behind

(As posted in the Huffington Post [Green section], Feb. 2, 2010, with documentation endnotes.)
______________________________________.

Rogue Star Update

By Richard A. Fineberg
Feb. 8, 2009

Sarah Palin says it would absurd for her not to consider running for President in 2012, but every misleading public utterance she makes about her performance as governor diminishes her credibility. The Feb. 2 "Rogue Star" post, which originated on this web site, starts with the fact-based recounting of the sequence of Alaska oil spills that silently accompanied her Lower-48 book tour three months ago, then considers underlying policy issues that spotlight once again the yawning abyss between what Palin says and what she does. The article concludes that Palin's claims that she strengthened Alaska's petroleum management systems are as phony as the notion that she was traveling the Lower-48 in that big, blue bus she used as a stage prop.

Reporters revealed that on her book tour Palin was actually flying far above the clouds in an expensive executive jet plane. (Some may find it significant that her choice of conveyance consumed an estimated nine times more energy than a more modest means of transportation.) But her mode of travel is a peripheral matter. When Palin gets to where she is going, her outlandish statements open the door to broader policy issues. Last week's post combines with previous analyses of Palin's performance as governor on Alaska petroleum issues to add to the growing body of evidence that many of Palin's statements simply cannot be believed.

Flint Hills
Refinery,
North Pole,
Alaska

From the North Pole refinery in interior Alaska (above) to the broken lines in the midst of the nation's largest oil field at the northern edge of the continent, (below), a look at the reality beneath the images Palin panders provides a sobering reminder of the importance of distinguishing between the inevitable complexities of public policy on a crowded planet and dreams of yester year.

Six-inch lateral
pipeline separation
and damaged well
house at Well #11,
Prudhoe Bay, Alaska, Dec. 21, 2009.

(Alaska Dept. of
Environmental
Conservation
photos)

In recent years, careful students of petroleum development have identified the concept of transparency as a bedrock principle, an important factor of governance that enables members of the public to come to informed conclusions and make correct choices regarding the future. Previous posts on this web site demonstrate that even though Palin sometimes pays lip-service to this important principle, many of her actions as governor defaced it.

It is at once a curse and a blessing of this day and age that we have access to much more information than we have time to digest. For those so afflicted, here is the conclusion of the Feb. 2 post:

"Largely unnoticed by the throngs that gathered to greet Palin on her book tour, the series of spills in Alaska during the last six weeks of 2009 undermined Palin's attempt to portray herself as an effective environmental protector. These developments converge with a review of her administrative record to illuminate significant portions of the mess Palin left behind when she abandoned public office in mid-stream and took her show on the road. Palin's misleading and superficial brags concerning her environmental performance mask the reality Alaska revealed during her Lower-48 book tour: "Drill, Baby, Drill" really means "Spill, Baby, Spill." Beyond the competence of a rogue politician, a close look at Alaska's recent environmental record suggests that is there is little reason to believe the industry can safely explore for oil and develop whatever deposits may be discovered in the Arctic National Wildlife Refuge and beneath the Beaufort and Chukchi Seas of the Arctic Ocean."

In light of the disturbing disparities between Palin's policy pronouncements and her actions, documented elsewhere on this web site, it would be more than absurd to consider the failed former governor for higher office. It would be a tragic mistake.

_______________________________________________________________________________________. ._

• A November 2009 post on Palin, below, covers the Alaska Risk Assessment project, another Palin administrative wreckage that has attracted little national attention to date.
  
  
• Click here to review July 2009 posts providing more information on the Alaska Risk Assessment project and other problems Palin left behind when she resigned.
  
  
• In July 2008, I prepared a report for the Alaska Public Interest Research Group on major unanswered questions regarding Palin's Alaska Gas Line Inducement Act (AGIA) and the natural gas pipeline tariff regime. Following up, I put together a packet of documents ("The Palin Papers") that I gave to Governor Palin. During that brief encounter I requested a sit-down meeting to explain my respectful disagreement with her natural gas team. Palin was either unwilling or unable to meet with me and never responded to these concerns. Two weeks later, she ascended to the national stage. Click here for the story.
  

________________________________________________________________________________________.

Comment (11/11/09)

Peer Review Panel Bashes
Palin's Risk Assessment Plan,
Confirms Earlier Public Criticism

Palin Overstates U.S. Oil Imports, Abuses
Energy Agency Data in National Review
While Advocating Aggressive Oil Drilling

By Richard A. Fineberg
Nov. 11, 2009
(Posted Nov. 12, 2009)

A national panel of experts has issued a blistering critique of former Alaska governor Sarah Palin's game plan for assessing the safety of the state's oil and gas facilities and operations. The report, released by Transportation Research Board (TRB) of the National Research Council October 15, concludes that the Palin administration's proposal for the Alaska Risk Assessment (ARA), which has wallowed in the planning stage for nearly 2-1/2 years, probably won't work. (To read the TRB report, click here.)

The TRB panel's report is the latest blow to Palin's oft-repeated claim that, as governor, she promoted environmentally responsible development in the 49th state; review of the ARA project history also raises questions about Palin's administrative style and capabilities.

When she launched the ARA in May 2007, Palin described the project as a $5-million three-year endeavor that would guarantee the safety and integrity of Alaska's aging oil and gas production and delivery systems. But the first two years and first million dollars were largely wasted on preliminaries. In June of this year - several months before the TRB report was released - the Alaska Dept. of Environmental Conservation (ADEC) put the project on hold and severed its working arrangement with its managing contractor after receiving a withering barrage of criticism of the project's proposed methodology from a variety of parties that included both industry and the environmental community representatives. Nearly halfway through the anticipated third and final year of the project , Palin's risk assessment has not yet begun. (For additional background on the ARA project, see the previous posts on this web site and the ADEC ARA web site.)

The TRB Report

The TRB report, a peer review analysis commissioned by the state, provides independent confirmation of the validity of many of the questions raised earlier by project critics. The 45-page document provides technical background and summary case studies to buttress the following strongly-worded unanimous conclusion of the team of seven experts:

Any successful methodology will have to be feasible given real-world constraints, analytically rigorous, and useful to the State. The committee believes that the proposed methodology falls short on all three criteria and believes that the method, as described, cannot be implemented given the time and budget constraints imposed by the State. The proposed methodology, as described, appears to be too data intensive given the available resources. It assumes significant industry cooperation that is neither promised nor likely to be forthcoming. Even if industry were willing and able to provide all of the data requested, it appears unlikely that the proposed methods are doable and would be useful in identifying and ranking the risk components of the (Alaska oil industry) physical and operational infrastructure system. (1)

In a National Review article posted the day after the TRB report was released, Palin repeated her upbeat assessment of her environmental performance as governor. In that article, Palin wrote:

My home state of Alaska shows how it's possible to be both pro-environment and pro-resource-development. Alaskans would never support anything that endangered our pristine air, clean water, and abundant wildlife (which, among other things, provides many of us with our livelihood). The state's government has made safeguarding resources a priority; when I was governor, for instance, we created a petroleum-systems-integrity office to monitor our oil and gas infrastructure for any potential environmental risks. (2)

Palin's somewhat incongruous reference to the Petroleum Systems Integrity Office (PSIO) is a tip-off to the disconnect between rhetoric and reality that is typical of her pronouncements. Her April 2007 executive order establishing the PSIO within the Alaska Dept. of Natural Resources, issued two weeks before ARA was formally announced, stated that the new unit would "lead the interagency effort . . . to evaluate industry oversight of oil and natural gas facilities, equipment, infrastructure, and activities on state oil and natural gas units and leases." (3) Despite the executive order, PSIO didn't get the risk assessment football. Instead, responsibility for the ARA project was given to ADEC. Informed observers believe that the switch was made so that the Legislature could reach Palin's $5 million target by appropriating only half that amount from the state general fund and matching the first $2.5 million with a similar sum from ADEC's Oil Spill and Hazardous Release Fund.

Regardless of the funding mechanism, several sources familiar with the nuts and bolts of petroleum risk assessment methodology say that Palin's $5-million ask was far too low to finance a competent assessment of Alaska's complex and far- flung petroleum production and delivery systems.

One of the principal purposes of the ARA project was to insure that an event like BP's 2006 corrosion problems at Prudhoe Bay would never happen again. Since ADEC's lax oversight of BP's anti-corrosion measures by ADEC played a significant contributing role in the North Slope corrosion fiasco, ADEC may not have been the best candidate to oversee this project. Whether the new agency might have handled the ARA better than ADEC is a matter of conjecture. But it is hard to imagine that the new agency's performance could have been worse.

When she announced the ARA May 1, 2007, Governor Palin said, "For our new Petroleum Systems Integrity Office (PSIO) to do an effective job, it must have access to comprehensive, thorough, and objective assessment data to tell us the status of the infrastructure and what it should be." She added, "No such system-wide risk assessment has ever been conducted of this complex system." (4) When she left office two years later, the promised risk assessment had yet to be undertaken. During those two years, one is hard-pressed to find any indication that Palin followed through to insure that the mission she had launched stayed on course to accomplish its stated purpose.

The day before Palin's most recent claim to have protected Alaska's environment by creating the PSIO, the TRB expert panel confirmed the view of critics that the methodology proposed by the ADEC contractor was not appropriate for assessing risks associated with the diverse facilities the ARA was supposed to review. Rather than conducting field assessments to identify and zero in on potentially risky operations, the draft methodology called for an unfocused demand on the industry to provide extensive data on every element of this far-flung network.

According to the TRB, responding to this unfocused data request would be inordinately expensive and time-consuming for the industry. In any event, the data could not be gathered and analyzed in the few months remaining on the project's three-year clock. (Nor, as note above, could a comprehensive report be completed under the $5-million budget the Palin administration had secured from the State Legislature two years earlier.)

Even if the ARA proposal were feasible, the TRB committee felt that it would produce a static picture facilities, rather than a dynamic view of complex operations that would expose risk-producing conditions. To demonstrate the kind of problems the ARA failed to cover, the TRB offered three case studies. Ironically, one of the committee's examples of a problem that the ARA risk assessment would not have revealed was the very problem that had led Governor Palin to launch the ARA project - BP's failure to implement adequate corrosion control at Prudhoe Bay.

The TRB committee felt the approach of the ADEC contractor to the complex petroleum production and delivery systems in Alaska would lead to inordinate focus on external events such as natural disasters, fires, explosions and power disruptions. At the same time, the panel of experts concluded, the proposed game plan would fail to focus on risks inherent to the system itself, such as operational hazards caused by a chain reaction of failures, human error, inadequate work force training, poor management of changes in operating processes and lack of regulatory oversight. (5)

A Striking Similarity

The TRB report echoed -- and provided authoritative confirmation of -- the criticisms made by embers of the environmental community and other parties during the ARA public comment period. The June 2 environmental community letter, drafted and circulated by the Alaska Wilderness League and signed by 15 parties, had much in common with the subsequent TRB report conclusions. For example, the environmental community letter, which formally asked the state to jettison the proposed methodology, contained the following observations:

• Instead of intensive field inspections to determine the condition of facilities and examine first-hand the implementation of operating, maintenance and training procedures, the ARA team hopes to gather and rely on aggregate data. (At this late date, however, the state and the project team have been unwilling or unable to obtain access to industry operations records. Nor have arrangements been completed to grant the risk assessors access to facilities to conduct initial or follow-up observations to ensure the validity of whatever data the project team does manage to obtain.)
• In developing its risk list, the assessment team proposes to screen out problems such as chronic small oil spills, other toxic spills and various safety infractions, reasoning that minor incidents do not cause serious problems. This approach is liable to overlook both problems with more than one cause and cumulative impacts - to the detriment of safety and the environment.

The environmental community letter also deplored the fact that ADEC and its contractor had narrowed the project's scope, commenting:

• As ADEC originally outlined the ARA project, an independent team was supposed to identify risks and recommend measures to mitigate them. It now appears that the risk assessment team will submit a catalogue of risks but will not make recommendations. Due to this change (requested by ADEC contractor Doyon-Emerald/ ABS after it secured the contract) the state loses the benefit of retaining a fresh and independent set of eyes and ears to examine Alaska petroleum production and transportation activities. (6)
  

In sum, Palin's claim to be an environmental protector glosses over nuts-and-bolts questions such as whether she had secured adequate funding for the ARA, whether the switch in management responsibilities was appropriate, and whether she followed through to make sure the ARA project stayed on course. Critical analysis of the ARA - validated by the national panel of experts reporting to the TRB - calls into question Palin's oft-repeated assertion that the creation of the PSIO demonstrates that "the state's government has made safeguarding resources a priority."

Misleading Oil Numbers - Again

In her recent National Review ode to domestic oil drilling, Palin cited misleading petroleum consumption and production numbers that paint an exaggerated picture of the nation's dependence on petroleum imports. This distortion suggests Palin may not have learned much during her rapid rise to national celebrity status in 2008. When Senator John McCain selected Palin as his running-mate for his presidential campaign he touted touted her as an energy expert, but Palin quickly began tossing around erroneous energy figures that revealed a surprising lack of familiarity with basic energy facts. (7) It appears that Palin still does not understand how EIA assembles and reports national energy data. In her recent National Review article, Palin once again tripped clumsily over the facts she spouted.

Palin opened the recent article with the exhortation "to drill here and drill now" to fuel our driving habit and fill the need for petroleum for "everything from jet fuel to petrochemicals, plastics to fertilizers, pesticides to pharmaceuticals." She continued:

According to the Energy Information Administration, our total domestic petroleum consumption last year was 19.5 million barrels per day (bpd). Motor gasoline and diesel fuel accounted for less than 13 million bpd of that. Meanwhile, we produced only 4.95 million bpd of domestic crude. In other words, even if we ran all our vehicles on something else (which won't happen anytime soon), we would still have to depend on imported oil. And we'll continue that dependence until we develop our own oil resources to their fullest extent. (8)

The figures Palin culled from EIA data would lead the uninitiated to believe that the United States imported more than 14.5 million barrels of oil last year, or 75% of domestic consumption (19.5 - 4.95 = 14.55). In fact, EIA data indicates that last year the U.S. imported approximately 11.0 million barrels of oil, or less than 60% of total liquid petroleum consumption. (9)

Coming a little over a year after she spoiled her national energy credentials by mis-stating petroleum data, Palin's latest numbers mistake constitutes what baseball Hall of Fame catcher Yogi Berra once famously described as "déjà vu all over again." More importantly, Palin's figures mislead the public by obscuring the important trend that EIA has labeled as a dramatic decline in imported oil. As a result of this decline, EIA currently estimates that in 2030 U.S. oil imports will decline to approximately 41% of total domestic consumption. The startling drop in projected oil imports over the last five years that Palin completely overlooks suggests that conservation has far greater potential to reduce dependence on foreign oil than aggressive drilling. (For EIA charts and a brief discussion of this trend, click here.)

A Recipe for Sloppy Governance

Press coverage of the TRB report has glossed over the facts that ADEC, after spending more than two years on preliminaries, has sacked its contractor. The light press coverage also failed to note the striking congruence between environmental community criticisms of the proposed methodology and the confirming peer review report, issued four months later. (For press coverage, click here; to see the environmental community letter signed by 13 state and national groups and two individuals, click here.)

Meanwhile, the authoritative rejection of the Palin administration ARA plan by a national panel of independent experts and her latest misadventure with energy numbers demonstrate Palin's penchant for oversimplification and mis-statement. It is difficult to believe that Palin, a card-carrying conservative, really equates the establishment of another government agency with strong environmental protection. In any event, Palin's loose rhetoric and her failure to follow through on administrative matters may be taken as indicators of sloppy governance. Perhaps the nation should thank Alaska for providing a clear case study in how not to choose a competent leader.

_______________

Endnotes

(1) Transportation Research Board of the National Academies, Technical Peer Review of a Proposed Risk Assessment Methodology on Alaska's Oil and Gas Infrastructure (Letter Report), p. 21.

(2) Sarah Palin, "Drill: Petroleum is a major part of America's energy picture. Shall we get it here or abroad?" National Review, Nov. 2, 2009 (posted Oct. 16, 2009).

(3) Office of the Governor, State of Alaska, "ADMINISTRATIVE ORDER NO. 234," April 18, 2007.

(4) Office of Alaska Governor Sarah Palin, "Governor Sarah Palin Calls for Comprehensive Assessment of Alaska's Oil and Gas Infrastructure" (press release 07-096), May 1, 2007.

(5) Technical Peer Review of a Proposed Risk Assessment Methodology on Alaska's Oil and Gas Infrastructure, p. 25.

(6) Alaska Wilderness League, et al., "Re: Recommendation to Terminate Alaska Risk Assessment Contract," June 2, 2009 (letter to ADEC Commissioner Larry Hartig signed by 13 organizations and two individuals; the author of this commentary was also the principal drafter of the Alaska Wilderness League's environmental community letter opposing the ARA's draft methodology).

(7) See, for example, Justin Blank, "Energetically Wrong: Palin says Alaska supplies 20 percent of U.S. energy. Not true. Not even close," Factcheck.org (http://www.newsweek.com/id/158656).

(8) "Drill."

(9) U.S. Energy Information Administration (EIA) domestic consumption, production and import totals for 2008 are summarized in EIA's Annual Energy Outlook 2009 in Appendix Table 11. EIA's established methodology for calculating imports is to compare the sum of net crude oil and product imports to total domestic consumption. (Note also that oil consumption calculations include two significant sources of domestic liquid petroleum - natural gas plant liquids and refinery processing gains - that Gov. Palin excluded from her production calculations.)

(Continued)
__________________________

Richard Fineberg addresses a conference on Caspian petroleum development in Baku, Azerbaijan, May 2003. (Photo: OSI Assistance Fndtn. / Azerbaijan.)
____________________________

Three major petroleum companies -- BP, ConocoPhillips and ExxonMobil (originally Sohio, ARCO and Exxon) -- control more than 90 percent of the North Slope production and own a similar share of the Alyeska Pipeline Service Company, which built and operates TAPS. The sprawling North Slope complex centers around Prudhoe Bay, the largest producing oil field ever discovered on the North American continent. About one million barrels of oil per day is pumped from beneath the frozen substrate and loaded into TAPS for the 800-mile journey across Alaska to the ice-free port of Valdez in Prince William Sound. There, the oil is loaded on tankers that carry approximately one-third of the oil consumed daily in the western United States.

Alaska's North Slope development and its pipeline link to market provide unusual opportunities to observe the actions of decision makers, as well as greater access to the central participants than most other places afford. Based on this experience and supplemented by information from two pipeline-dependent petroleum provinces of the Former Soviet Union, the information presented here points to two significant conclusions:

• (1) petroleum developers can and frequently do use pipelines to maximize profit and inhibit competition, to the detriment of host populations; and
• (2) the chronic discrepancy between promise and practice on major oil projects frequently places the populace and the environment at significant and needless risk.

The material presented here was researched and compiled by Richard A. Fineberg, founder and principal investigator of Research Associates of Ester, Alaska. Fineberg has observed Alaska petroleum development for three decades as a prize-winning reporter, as an advisor to the Governor of Alaska on oil and gas policy and as an independent consultant to investors, government agencies and non-profit organizations. In recent years his horizons have expanded to include two oil provinces in the Former Soviet Union, the Caspian Basin and Sakhalin Island. Often controversial, Fineberg's petroleum research has earned a reputation for dedication to factual accuracy and carefully reasoned analysis.

A fundamental premise of this web site is that it falls to each of us, as citizens, to inform ourselves and respond appropriately to the issues and events that shape the broad directions of our society and the detailed fabric of our social interactions. Based on the fact-driven information presented here, readers can come to independent judgments regarding the authenticity of the content, the significance of the relevant facts and the logic and appropriateness of the conclusions. In effect, each of the topics reported here can stand alone as a documented case study in petroleum development.

During the 3-1/2 decades since the discovery of the nation's largest oil field at Prudhoe Bay on Alaska's North Slope, events from Watergate to the collapse of powerful corporate entities such as Enron and WorldCom demonstrate that large institutions frequently fail -- often by grotesque margins -- to live up to legal and moral obligations and to deliver on their public pronouncements. Concurrently, the major oil companies who have played such a large role in Alaska's development have performed their tasks with a chronic and troubling discrepancy between promise and practice. Despite lavishly funded advertising campaigns and public relations efforts urging that Alaska's oil companies can be trusted as the avatars of social salvation, closer examination reveals a profound gap between what these companies say and what they do. With equally disturbing regularity, when confronted with evidence of those failures, government has failed to protect the public interest. This web site explores the economic and environmental impacts of those failures in concrete terms in the belief that well-informed individuals can and will make a positive contribution to the course of human development.

Reports on pipeline and petroleum development issues found in the "Oil Patch" section of this web site may be understood as case studies providing insight into the relationships among powerful corporate and government institutions and the complex interactions between individuals and institutions. At this broad level, a growing body of research on the political and economic aspects of petroleum development known as petropolitics suggests that the price of oil wealth includes, with disturbing frequency, poverty, a widening gap between rich and poor, economic stagnation, corruption, dictatorship and war. The petropolitical approach to petroleum development goes far beyond the conclusions presented here regarding pipeline economics and the industry's chronic discrepancy between promise and practice. While one reader may take the fact-based case studies presented here to support a petropolitical interpretation of petroleum development, another reader may apply the same information to a different understanding of social activity; in any event, these case studies are fact-driven and therefore stand alone.

In sum, the principal purpose of this web site is to gather in one place many of the basic facts regarding the environmental impacts and economic results of oil development in Alaska and elsewhere - information that industry and government prefer to ignore or to spin. Using case studies presented with fidelity to reason and factual accuracy, FinebergResearch.com brings to public attention information about economic and environmental issues related to petroleum development that is not readily available elsewhere.

(August 2004)