Palin Successor Focuses on Energy Agenda

FAIRBANKS, Alaska (THE WALL STREET JOURNAL via Dow Jones), Oct. 27, 2009

When Sean Parnell was sworn in here as Alaska's 10th governor in July, dozens of reporters from the lower 48 states were on hand to mark the transfer of power from his celebrity predecessor, Sarah Palin.

Returning to this city last month, Mr. Parnell faced just three journalists -- two of them local -- after giving an address at the Greater Fairbanks Chamber of Commerce luncheon.

Mr. Parnell and Alaska have faded from the national spotlight since Ms. Palin surprised the political world in July by resigning as Alaska governor with 18 months left in her term. The former Republican vice-presidential candidate, who cited numerous ethics inquiries as well as political and personal attacks as reasons why she resigned, has left Alaska politics behind to write a memoir, "Going Rogue: An American Life."

"Alaska is in good hands as Governor Parnell continues to move the state forward," Ms. Palin said Monday.

The controversies that followed Ms. Palin after she ran for national office took a toll on her once-formidable approval ratings back home. When she left office July 26, her favorable rating had fallen to 52% from a high of 88% soon after she was first elected in 2006, according to surveys by Dittman Research Corp., based in Anchorage.

Mr. Parnell's favorable rating, meanwhile, stood at 80% as of Oct. 16, according to a Dittman survey of 274 Alaskans, with a margin of error of plus or minus 4.8%.

"It looks good for Sean, so far," said David Dittman, owner of the polling company. "I think he's a refreshing change for most people."

Mr. Parnell has been focusing on how to rebuild Alaska's energy-dependent economy, which has been battered by falling oil prices, and jump-starting a proposed natural-gas pipeline project. While Alaska has only 700,000 residents, the governor's role is nationally significant because the state is home to some of the country's biggest deposits of mineral riches such as oil and gold.

Mr. Parnell faces many challenges. Alaska's economy was hurt by the fall in crude-oil prices from a peak of $145.29 a barrel in July 2008 to $78.68 a barrel Monday. Alaska's unemployment rate has soared to 8.4% in September from 6.7% a year ago. Mr. Parnell also has to step out from Ms. Palin's shadow, said Jerry McBeath, political science professor at the University of Alaska in Fairbanks.

Mr. Parnell has moved to ease the economic pain on Alaskans. He is pushing to extend a one-year suspension of an eight-cent-a-gallon gas tax enacted by his predecessor, for instance. The suspension is set to expire in January.

At the same time, Mr. Parnell is looking at ways to deliver more natural gas around the state, such as by increasing production in the Cook Inlet. Alaska's natural-gas supplies are remarkably constrained to its residents despite the state's abundant reserves, partly because of logistical issues in transporting gas to far-flung places.

To boost the economy, Mr. Parnell is working toward more oil exploration off Alaska's continental shelf, where there are an estimated 27 billion barrels. In September, he flew to Washington to meet with Interior Secretary Ken Salazar and other officials to support an effort begun by the Bush administration to expand offshore drilling, including in Alaska. Though the Obama administration hasn't determined whether to move forward with that plan, Mr. Parnell estimates that as many as 35,000 jobs could be created by opening those Alaskan waters to oil production.

Mr. Parnell is also working to kick-start a proposed natural-gas pipeline project. The estimated $30 billion pipeline, which Ms. Palin licensed to TransCanada Corp. in 2008, would connect the gas reserves of Alaska's North Slope with markets in the lower 48 states. That would provide thousands of new jobs and help offset declining oil production from the giant Prudhoe Bay field.

But the project faces hurdles, including financing amid the recession. Two major energy producers on the North Slope, ConocoPhillips and BP PLC, are pursuing a competing proposal.

Mr. Parnell is also mending fences following Ms. Palin's administration. By January, he plans to move his family from Anchorage to the state capital of Juneau. Many Juneau residents resented Ms. Palin's refusal to relocate there from her home in Wasilla.  

Copyright (c) 2009 Dow Jones & Company, Inc.