Palin, the former mayor of Wasilla, seemingly came out of nowhere to thrash not only incumbent Gov. Frank Murkowski, but also John Binkley, a longtime Fairbanks businessman, in the Aug. 22 statewide primary election.

Palin is campaigning on an ethics-first platform and against a Republican old-boy establishment. Her charisma and throw-the-bums-out message clearly resonated with an anti-incumbent mood among the electorate - at least in August.

Polls indicate she is maintaining a strong challenge to her opponents, former Gov. Tony Knowles, the Democratic candidate, and an independent, businessman and former legislator Andrew Halcro. The gap will likely narrow in the remaining weeks before the November general election, however.

"There are a lot of good things on the horizon for Alaska, but the only way the state can make these things happen is to have leadership in our state government that people can trust. With our current governor, we have an atmosphere of distrust and this has been aggravated by the recent FBI raids on legislators' offices and anti-industry sentiment in our state," she said. "We can get this trust and transparency back, and we must start within our own Republican party. There are a lot of good things on our Republican party agenda, and this is all the more reason to move to re-establish trust in the political system."

On specific issues, one point of disagreement between Palin and her chief opponent, Knowles, is over a Project Labor Agreement for the gas pipeline. Knowles strongly favors a Project Labor Agreement as part of the state contract, while Palin says she is uncertain about that, but is clear that the agreement shouldn't show favoritism to union workers.

There will have to be some sort of Project Labor Agreement, Palin acknowledged, but she is uncertain as to whether it should be a part of the contract with the state, or between the pipeline developer and labor organizations. "Is it government's role to tell the parties to a construction project what a PLA should look like? To say the job will be union-only is not realistic, however," she said.

"We should not make this a union versus nonunion contract. We want to bring people together and not make this contentious early on. There are not enough trained people in the wings, and the work needs to be competitive," she said. Palin said she has an understanding of union issues because her husband is a union worker on the North Slope. "Still, I do not have a good answer on this," she said.

Either way, the state likely will have to import a number of workers. "I'd love to say we don't have to import a work force," she said. But in the early days of the work, she said, some imports will likely have to occur, mainly because of the sheer numbers that will be needed.

"But the state needs to help young people get trained to take the legacy jobs, those that will be held after the construction crews have packed up. Our training programs need further focus." There has to be a focus on Alaska-hire, she said, and that would have to be done in a PLA, which is the only method that has stood through a state Supreme Court decision.

During her interview, the Journal posed several questions on a variety of issues facing the state. Here were her answers.

Q: What are your feelings on the Pebble mine proposal? Aren't there inherent risks in mining? We know things can happen. How do we measure the risk?

This is a tough one to judge. The permits are not applied for. My family has a commercial fishing background in the region, and I will not support anything that risks the world's richest salmon fishery. At the same time we haven't seen what Northern Dynasty will ultimately propose. There is a process in place, and we need to allow it to unfold, and to allow Northern Dynasty to make their applications. I do have concerns whether the company will be able to keep the promises they make. We want to be cautious.

In reality, with this project, there will be remediation from now to eternity. There will be impacts. We do not know to what degree. The footprint of the mine is huge. That is lost on the public. It will be one of the largest open-pit mines in the world.

Q: Would you feel any better if it were an underground mine?

Not necessarily, but we won't really know anything until they make their applications.

Q: What are your concerns for the region?

I have a lot of concern for the Bristol Bay area. So much of my family lives out there. The cost of living out there is very high, and it impedes progress in the area. We know that people must work, and most folks in Western Alaska feel they don't have a lot of job opportunities. It is a very sad situation. A lot of young people feel they don't have hope living in their communities. They don't see job prospects. This results in a lot of societal problems. Government does have a role to provide the tools and job opportunities in these areas. It is so important.

We also know there is hope for revitalization of the fisheries there. Our resource out there is a given. It's a known. What we have to do is allow value-added industry out there, and for regulations in our fisheries to provide for more competition. We need to create an environment out there where folks will know that the resources are there, and they are owned collectively. It is important that we have access to these resources, that they should be developed and developed for the purpose of providing work for the people who live in the area.

Q: Where do you stand with the oil industry?

I'm not anti-industry. As a former mayor of the fastest-growing area in Alaska and a former regulator of oil and gas, I understand and appreciate the contributions that industry provides to our state economy and the U.S. economy. My husband started his job on the Slope 18 years ago. He's a blue collar union man up there, and I appreciate the job opportunities provided him. He's from Dillingham, from Bristol Bay. He's got good skills, a good work ethic and he has been rewarded for that work ethic, materially, if you will, with a good job on the North Slope. He's the kind of Alaskan I want to see more of employed on the Slope.

I also have a great understanding of industry's motivation. Industry's motivation ... unfortunately for us ... is that they take as much possible and leave as little behind, but that's what the CEOs of these producing companies are supposed to do; that's what they are tasked to do by their shareholders. It's all the more reason for us to understand what our relationship with the industry needs to be; that the state's CEO works just as hard for the shareholders in this state, who are fellow Alaskans.

Q: A revision of the state's school foundation program is needed but a change to the revenue distribution formula is bogged down in the Legislature. How can we solve this?

Our state government has few mandated services, but education is one of them. There is no excuse for the problems and disagreements that have led to the current impasse on the foundation formula. There has been a contentious atmosphere about this, and we need to bring people together on a resolution. That's why we need an atmosphere of trust in our system. If you don't have that, you'll have these kind of gridlocks in the system.

Q: What are your concerns with ethics, including within the legislative branch?

The Legislature must also work to re-establish public trust. If a legislator works as a consultant, he or she should describe in some detail what he or she does. We do have the (Alaska Public Offices Commission), but many things are being done that violate the spirit of our conflict-of-interest disclosure laws.

Q: What concerns do you have with the gas pipeline?

I am concerned with the idea of the state being a part owner of the project and to be a regulator at the same time. I am still not comfortable with this. I would also not have the state take its gas in-kind for the long term, unless I can see a compelling reason. I have had some opportunities to speak to the administration on this and with the three producer companies, but there is still a lot of information that I need. I know that I don't like the idea of a long-term lockup on oil production taxes.

We also need a lot more assurances on work commitments and benchmarks than what we see today in the draft contract, and we need guarantees that gas will be available for in-state use.

A lot will also depend on how the current governor - and the next governor - will handle the Point Thomson lease extension issue.

(Editor's note: Point Thomson is a large gas field on the North Slope where there is controversy over work obligations by the lessees. Point Thomson gas is important to the gas pipeline project.) We'll have to see how that plays into this. On this, I would like to bring back some of the former Department of Natural Resources officials who resigned, to help us determine if the companies are in default on the lease obligation.

Q: You've said that a gas project must include a spur line to Southcentral Alaska. What do you mean?

This needs to be part of the deal. In-state access to gas is fundamental, and there are not enough assurances in the current deal that we will be able to get gas to Southcentral Alaska while Cook Inlet gas reserves are being diminished. Of course, the users of gas should be expected to help pay for a spur line.

Q: How do you feel about congressional earmarks placed in federal funds to the State Transportation Improvement Plan (STIP)?

When I was a municipal mayor I was very frustrated at times with the state's STIP process. I'm all about local control because people at the local level are the best able to make judgments on projects that affect them. Given that, I'd like to minimize the earmark process in federal funding. Alaska is not seen in a very favorable light in Congress. We're going to have to find a more mature way to go about how we request federal funds.

Q: Any thoughts on the current issues with maintenance on North Slope pipelines?

The state has to be more vigilant as a regulator. We have to make sure proper maintenance is being done. These oil fields and pipelines are our economic lifeline. Until now, the gathering lines and oil field pipelines have been unregulated.

Q: How would you handle the state's $7 billion liability to the public employee retirement funds?

A pension is a promise, and we have to make sure that public employee retirement benefits are fully funded. I would take part of any future revenue surplus and start whittling away at this liability. An important thing, however, is to look back at how we got into this, so that something like it doesn't happen again. How did this get started, and then fester for so long? How did the liability get to $7 billion? When Gov. Murkowski took office in 2002, it was already a liability of $4.4 billion. Next year it may be $9 billion.

Tim Bradner can be reached at tim.bradner@alaskajournal.com.

Palin

Sarah Palin was born in 1964 in Idaho and moved with her parents, both teachers, to Skagway in 1964, to Eagle River in 1970 and Willow in 1972, where she has since resided. Palin graduated from Willow High School in 1982 and received a bachelor's degree in communications from the University of Idaho in 1987. She worked in media and for utilities, was elected to Wasilla's city council and then mayor of the Matanuska-Susitna community for two terms. Palin ran unsuccessfully for lieutenant governor in 2002, and was subsequently appointed as the public member of the Alaska Oil and Gas Conservation Commission.