Thomas Lamb · June 11, 2026 · Alaska Policy
Old Ideas, New MOU
The Alaska Hire Mirage — Twenty Years On
June 11, 2006 · June 11, 2026 · Hicklin v. Orbeck · 500 Members · 1,600 Welders Needed
On June 11, 2006, I published a post on this blog called Old Ideas. It was a response to former Governor Wally Hickel's continued advocacy for Alaska hire preferences on the proposed gas pipeline. I quoted the full Supreme Court opinion in Hicklin v. Orbeck — the 1978 ruling that struck down Alaska's resident hiring preference law — and I closed with a single question:
"The education system in Alaska has not adequately addressed this. How many trained Alaskans will there be?"
Today is June 11, 2026. Twenty years to the day.
This morning, HB 381 passed out of the House Finance Committee unanimously and headed to the House floor. This afternoon, Alaska LNG and Alaska's Building Trades organizations stood together and signed a Memorandum of Understanding promising Alaska workers first.
The same old ideas. A brand new MOU.
My question from 2006 now has an answer. The answer is not encouraging. But there is something else in the 2006 record that has not been mentioned in any of today's coverage — and it goes to the heart of why the MOU signed today is legally weaker than it appears.
What I Said Then — All of It
Three months after my Old Ideas post, I answered a KTUU candidate questionnaire during my 2006 legislative campaign. One question addressed the Murkowski gas pipeline deal and what elements were worth preserving. I wrote:
"The ownership will also give weight to an Alaska hire provision. Without it, the Hicklin vs. Orbeck case will carry weight in striking down any Alaska hire provision."
That was not a casual observation. It was a precise legal argument. The only mechanism that gives Alaska hire provisions real legal weight is state ownership of the pipeline infrastructure — a proprietary interest that allows the state to impose conditions on its own property rather than discriminating against nonresidents in a private labor market.
The Stranded Gas Act tried to thread that needle. It included ownership provisions and Alaska hire language together because the lawyers knew one depended on the other.
Today's MOU was signed between the developer and the Building Trades. Not the state. Not through AGDC's 25% equity stake. Not through any proprietary mechanism that would give it constitutional grounding.
It is a handshake between two private parties that cannot be legally enforced against anyone — and certainly not against the constitutional standard Hicklin established.
Hicklin — Still Controlling
In 1972, Alaska passed the Alaska Hire Act requiring that oil and gas leases and pipeline agreements contain a preference for Alaska residents. The stated purpose was reducing unemployment.
In 1978, the U.S. Supreme Court struck it down unanimously under the Privileges and Immunities Clause. Justice Brennan wrote that Alaska could not discriminate against nonresidents without proving a substantial justification — specifically that nonresidents were causing the unemployment the law was meant to fix.
The Court found Alaska could not meet that standard. The unemployment was structural — rooted in lack of education, job training, and geographic remoteness among residents. Nonresidents were not the cause of the problem.
Moreover, the Court noted that the oil and gas was destined for interstate and international commerce — which further undermined Alaska's ability to impose hiring preferences.
Apply that ruling to AKLNG in 2026:
- Alaska is not experiencing unemployment — it is experiencing a workforce shortage
- The gas is destined for Asian export markets
- The hiring preference lives in a non-binding MOU between private parties — not a statute, not a proprietary state ownership condition
The legal foundation for Alaska hire on this project is weaker today than the law the Supreme Court struck down forty-eight years ago. In 2006 I identified state ownership as the one legal mechanism that could change that. The MOU signed today does not use it.
The Answer to My 2006 Question
Twenty years ago I asked: How many trained Alaskans will there be?
Here is what the project needs at peak construction, according to the developers:
| Trade | Workers Needed |
|---|---|
| Pipefitters & Welders | 1,600 |
| Engineers | 1,900 |
| Ironworkers | 450 |
| Electricians | 400 |
| Logistics | 3,500 |
| Total Peak | ~7,000 |
Here is what Alaska's closest union local to the pipeline route actually has:
UA Local 375 — Fairbanks Plumbers and Pipefitters: approximately 500 members.
Their accelerated pipe welding class — the largest in the program's history — had fourteen students.
Nationally, the American Welding Society projects a shortage of 400,000 welders. The average age of a U.S. welder is 55. For every five retiring, only two are entering the field. Alaska is not insulated from this shortage — it is more exposed to it. A state of 730,000 people cannot produce a specialized construction workforce of 7,000 peak tradespeople on a project timeline measured in years, not decades.
The project needs 1,600 pipefitters and welders. The closest union local has 500 members total. The math does not work regardless of what any MOU says.
The education system did not adequately address this. Twenty years of pipeline discussions did not change the answer.
The Borough Problem the MOU Cannot Solve
When thousands of workers come from Outside to build this pipeline — and by mathematical necessity, most of them must — they arrive in communities. They drive on roads. They need hospitals and fire services. Some bring families. Their children attend schools.
Anchorage Mayor Suzanne LaFrance testified to the House Finance Committee that AKLNG could cost the Municipality of Anchorage up to $173 million over nine years — even though the pipeline does not pass through Anchorage. Thousands of outside workers would use Anchorage as a logistical base, generating real demands on local government services.
Borough mayors along the pipeline route raised the same alarm. Under HB 381, the volumetric tax replacing the property tax brings in approximately 90% less revenue than what it replaces — not enough to cover additional students in schools, more vehicles on roads, or more fire and EMS calls.
The $40 million community impact fund in the bill sounds significant. Against $173 million in projected costs to Anchorage alone, it is a rounding error. The fund's size, qualifying communities, and distribution formula remain unresolved as the bill heads to the floor.
The MOU promising Alaska hire does not reduce the number of outside workers — it cannot, because the workforce does not exist locally. What it does is provide political cover for a tax structure that cuts borough revenue by 90% while the outside workforce those boroughs must service is baked into the project's construction math.
Three Failures, One Signing Ceremony
The Alaska hire promise in HB 381 fails on three levels simultaneously:
1. Legally — Hicklin v. Orbeck requires that nonresidents be the cause of an identifiable harm before Alaska can discriminate against them in hiring. In 2026 the problem is a shortage of workers, not their surplus. I identified in 2006 that state ownership was the only legal mechanism that could give hire provisions real weight. The MOU does not use it.
2. Practically — The trades workforce does not exist in Alaska at the scale the project requires. Local 375 has 500 members. The project needs 1,600 pipefitters and welders at peak. A non-binding MOU cannot conjure workers who have not been trained.
3. Fiscally — Outside workers flooding borough communities generate service costs that the tax structure of HB 381 was designed not to cover. The Alaska hire promise draws political attention away from a structural fiscal problem for every borough along the route.
Same Day, Twenty Years Apart
On June 11, 2006, I asked how many trained Alaskans there would be.
Three months later I told KTUU that without state ownership, Hicklin v. Orbeck would carry weight in striking down any Alaska hire provision.
On June 11, 2026, the Alaska Legislature passed a bill with a promise to negotiate a PLA, and a developer signed a non-binding MOU with the Building Trades — not through the state's ownership stake, not through any proprietary mechanism, not through any legal structure that Hicklin would recognize.
The ideas are old. The MOU is new. The math and the law have not changed.
Sources: Alaska Public Media (June 11, 2026) · Alaska's News Source (June 11, 2026) · Must Read Alaska (June 10, 2026) · Alaska Beacon (June 5, 2026) · Anchorage Daily News (June 1, 2026) · Underground Infrastructure (November 2025) · UA Local 375 · American Welding Society · Hicklin v. Orbeck, 437 U.S. 518 (1978) · AS 43.82.230 · Thomas Lamb, "Old Ideas," June 11, 2006 · Thomas Lamb, "Answers to KTUU Questionnaire," September 16, 2006 · Thomas Lamb, "The Stranded Gas Act," July 2, 2006
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