Alaska House Approves Gas Pipeline Project

State Senate Must Still Weigh Canadian Company's Proposal To Unlock North Slope Gas

(AP)  The Alaska State House of Representatives has approved a state license for a Canadian company to pursue a natural gas pipeline project that could unlock 4.5 billion cubic feet of North Slope gas reserves daily.

The House backed the plan on a 24-16 vote Tuesday. A reconsideration vote is planned Wednesday, but that's usually a formality. If approved then, the bill will go to the state Senate, which must approve or reject it before Aug. 2.

Lawmakers in Alaska's House voted to support Gov. Sarah Palin's proposal to award TransCanada Corp. an exclusive license to pursue federal certification for the 1,715-mile pipeline estimated to cost between $26 billion and $30 billion.

TransCanada Vice President Tony Palmer wasn't ready to celebrate just yet, nor would he make any predictions on how the Senate's vote will play out.

"I'm always uncertain until I see the votes," Palmer said. "I had no expectations as to how the votes would go until I saw the buttons pressed."

The license doesn't guarantee pipeline construction. It simply calls for TransCanada to embark on a costly process of pursuing a federal certificate, but also with up to $500 million in state seed money.

There's the rub, said Rep. Mike Hawker, an Anchorage Republican who spoke out against the Alaska Gasline Inducement Act, or AGIA, license before casting a dissenting vote.

"We have to make it very clear is that this AGIA license is not a commitment to do anything other than process a whole lot of paper," Hawker said. "There is no commitment to move a shovel full of dirt toward a pipeline project."

Rep. Les Gara, an Anchorage Democrat, backed Palin's endorsement of TransCanada with the same understanding as Hawker, but with a different outlook.

"I think this is going to put the state on a stable footing," Gara said. "There is no clear path to a gas line. This is the clearest path to a gas line that protects the state's interest. That's all it is."

Even if the Senate concurs, it will still be at least another 10 years before any market sees Arctic gas. And there is still a competing pipeline moving forward without the state's startup money.

That project is a joint venture between North Slope oil producers and gas leaseholders ConocoPhillips and BP PLC, who believed Palin's AGIA format was too restrictive.

In the end, Majority Leader Ralph Samuels said the it's not the government's role to pick a winner. The Anchorage Republican was the lone dissenting vote when the law as passed last year, but had more support this year.

"The government is ill equipped to pick a winner in the marketplace," Samuels said. "We've simply blessed a winner in AGIA here."

House Rules Chairman John Coghill, a North Pole Republican, disagreed before voting yes.

"We are not picking a winner here, because there is not gas going to market," Samuels said. "What we are picking here is somebody who will work with us under certain conditions.

"It gets us lined up with a pipeline builder who not only who knows how to do it, but we get to know how they do it both in cost and timeline."

The vote takes the state another step away from a contract unsuccessfully pushed by former Gov. Frank Murkowski.

He settled in principle with BP, Exxon Mobil Corp. and ConocoPhillips on fiscal terms - taxes and royalties - for producing the North Slope gas.

The deal would have frozen oil taxes for 30 years and gas taxes for up to 45 years for the three major oil companies, but it did not guarantee a pipeline would get built.

The Legislature would not vote on it because many lawmakers believed it was too much of a giveaway to the energy industry, about $10 billion over the lifetime of the deal.

This Legislature, however, acted under AGIA, a year-old law that established bid requirements for those interested in building a pipeline.

It was also a law had BP, ConocoPhillips and Exxon Mobil balking and refusing to submit plan under those guidelines last at the Nov. 30, 2007 deadline.

TransCanada's was one of five applications that applied and the only one deemed compliant under the AGIA guidelines. Meanwhile BP and ConocoPhillips weighed in three months ago their a pipeline project called Denali.

And the two companies have already filed paperwork for preliminary federal permitting and $40 million worth of field work is under way.

But Denali's 12- to 15-page plan is routinely criticized as sorely lacking details compared to TransCanada's itemized offering found in thick three-ring binders.

Some lawmakers believed turning back TransCanada would have left Alaska only with the Denali plan and would set the state back several years.

"I don't want to go back to where I was with the oil companies completely running the show," said Rep. Mike Kelly, a Republican.

"I do not wish to go return to a one-option scenario that has been sold to us with a power-point presentation," he said. "If we turn this down that would be a serious, serious mistake."

[Gary Kempf]

"We are not picking a winner here, because there is not gas going to market," Samuels said. "What we are picking here is somebody who will work with us under certain conditions.

It is good to see Alaska''s elected officials are looking out for the good of Alaska''s population.....

Now, it would be nice if those in D.C decided to follow their example......

[perceptions5]

The DEMOCRAT PARTY continues to block US companies from developing our natural resources, especially oil.

The Democrat block it because their being "paid" to block it by one of the historical special interest groups, Environmentalists.

The Enviro''s pay for their election campaigns every two years and in return for the "dirty influence money" the Democrat vote NO to "domestic development of our natural resources".

These liberal fascists that now control our Congress have no plans to bring relief to Americans, that would upset their "steady flow of money payments" from the environmentalists.

My fellow Americans don''t HOPE for cheaper energy prices...............................

VOTE for cheaper energy prices...........................VOTE REPUBLICAN.!!

[cfin5]

I''m always checking out issues that concern ALASKA. I''ve never been there yet, but have longed to live there permanently ever since reading a Jack London book from the Library as a kid. That longing won''t leave me alone,....it''s getting worse. Alaska is to me Americas last frontier of freedom for those like me. I even like the ease in spelling it here on this confounded computicator........God Bless Governor Sarah Palin and all Alaska! Please revive any generous land grant programs. I can''t afford such a purchase, but I do have more time than money. Give me some free dirt to work on and I won''t let you down, I will always make it smile.

[johngoodnews]

Gas? Natural gas? What''s the oil industry coming to? T. Boone Pickens look out! There''s other folks out there who know as much about the oil industry as you know and they''re trying to grab up the gas reserves on the North Slope. Better get cracking, T. Boone, or Nancy and her friends are going to be driving over your grave with their clog-shot feet pressed pedal to the metal in the Volvo SUVs.

[superdem]

perceptions5 - you''re nuts. First of all, your insulting refusal to say Democratic Party, which it is, and your further insult about liberals being fascist, which by definition is impossible, shows you know nothing about democracy or fascism. Please look these words up before using them again. Environmentalists do NOT have control of Congress, that''s so stupid as to be laughable. Corporations control America and the Congress, as surely as they control the Republican Party. Democrats DO oppose the slash and burn policies of the major energy companies, to protect America''s land, air, and water from the rape and pillage of her natural resources. Isn''t that terrible ? Democrats support massive new energy projects for solar, wind, and alternative fuels. Sun and wind are free, so clean and cheap energy IS the goal, unlike the oil companies, who are making record profits while America suffers. If you want to be mad at someone, why not be mad at the real cuprits in all this ? It''s not the Democrats. It''s Bush and his oilmen friends. GET A GRIP !

[deacon20081]

$500 MIllION of State Money with No Gurantee of anything? Are they crazy?

[bretster7]

Funny how the price of a barrel of oil has steadily dropped since Bush announced that he wanted to lift the offshore drilling.
All the idiot naysayers telling everybody that doing so would not help with the price of oil. That it would take "10 years" to see any relief.
Just goes to show how ignorant and out of touch with the reality of economics the average liberal is.
Remember, what is good for the American people is bad for the Democrats, and what is good for the Democrats is bad for the American people.