The People Lost
It was a race between the oil-natural gas lobby and an aroused public opinion. The people lost. But not by much and because the Democratic leaders of the House of Representatives would not allow a few more days for more Americans to learn that their gas bills would be going up in order to pay in advance for a $50 billion Alaska Natural Gas Pipeline.
Conservative Republican Thomas Corcoran of Illinois said it “was the greatest consumer rip-off ever.” Liberal Democrat Richard Ottinger, D-N.Y., agreed. Why, they and other representatives asked, should residential and business consumers of natural gas be required to assume the costs of this expensive project, whether or not the pipeline ever is completed, whether or not they receive any gas from it and no matter how high the eventual cost?
Although government estimates of the annual investment returns on this pipeline range from 30 percent to 50 percent a year, the richest companies in the world-Exxon, Arco and others-do not want to bear the risks of the project. They want to own and reap the profits of the pipeline. But these giant corporations want you, the natural gas consumer, to assume the costs and risks of the project without having any ownership and dividend rights. “It all amounts to an outrageous oil-gas industry tax on millions of American families,” said one congressional staffer.
Led by John McMillian, chairman of Northwest Alaska Pipeline, the oil-gas lobbyists spent a lot of money in the past few months in the nation’s capital. They hired the law firms of Walter Mondale and Robert Strauss. Also on board was the consulting firm of Anne Wexler, another prominent Democrat. They retained the public relations firm of Peter D. Hannaford, a former adviser to President Reagan in order, McMillian admitted, to obtain access to the White House and Republican legislators.
A longtime Democratic Party contributor, the Washington-wise McMillian and his influence peddlers moved their measure through the Senate by a vote of 75 to 19 only a month after committee hearings were held. There was very little press coverage.
This is a move of extraordinary speed, particularly since the Senate already had a logjam of bills to consider. The first two senators I called last week admitted to me that they voted for the oil-gas industry position without adequately thinking the matter through. They pleaded lack of time to deal with all the issues rushing in on them.
The next step for McMillian was the House of Representatives. By overwhelming majorities, two House committees, chaired by John Dingell, D-Mich., and Morris Udall, D-Ariz., put the risks on their consumers back home for the world’s costliest construction project. Both chairmen voted with McMillian; Dingell suddenly changed his mind, overruled his staff and went with the Exxons. Still, very little press.
Not until early December did the media begin to explain what was going on to the American people Citizens began demanding explanations from their representatives. Observers could feel the pressure of the people in their district build almost by the day. Representatives began to wonder how they were going to explain bailing out the hugely wealthy oil and pipeline companies and the New York banks on the backs of hard-pressed working constituents.
In November, vote counters in the House gave the consumer position less than 100 votes. When the first vote was taken Dec. 9, the oil-gas lobby won 233-173. The next day, due to a procedural obstacle, the House voted again 230-188, reflecting the momentum on the consumer side. House Speaker Tip O’Neill and the Reagan White House knew that to delay the vote a few days, as some lawmakers wanted, was to court defeat.
Against a gigantic lobbying effort of big corporations arm in arm with big politicians of both parties-except for dissenting Rep. Bob Michel, R-Ill., the Republican minority leader of the House-the impact of public opinion, nonetheless, almost was victorious.
The Alaska gas pipeline issue will not go away. There will be huge cost overruns and the corporations and banks will likely be back demanding further federal loan guarantees. The gas may be too expensive to market if the pipeline ever is completed. And, to make burdens on balance of payments worse, the pipeline consortium intends to buy almost all the pipe from foreign companies.
All in all, CBS commentator Bill Moyers put it best when he said: “Shifting the burden of investment from corporations to consumers wasn’t the only way to finance this project. But other alternatives were never considered, because John McMillian and the companies know the right people in the right place at the right price. So much for all that Republican talk about free enterprise. And so much for a Democratic Party controlled by lawyers and lobbyists who have offered its soul to the company store. The two-party system is not only up for grabs-it’s up for sale.”