ConocoPhillips to Gov. Palin: "an apparent misunderstanding of the economic realities"

ConocoPhillips has responded to Alaska Gov. Sarah Palin’s rejection of their plans for a natural gas pipeline from the North Slope and is calling for a meeting with legislators to move the plan forward.
Earlier this month Palin told the Houston company its proposal is too much like the deal former Gov. Murkowski reached with the state’s major oil producers in 2006, which was rejected by the legislature.
In a response dated January 24, ConocoPhillips’ Alaska chief, Jim Knowles asked Palin to give its proposal “fair and thorough consideration” and create a team to review ConocoPhillips’ proposal to create a “predictable” fiscal framework under which natural gas producers would operate in the state.
The letter also says the company was “surprised and disappointed” by Palin’s letter and that her expectations that the construction of a pipeline be independent of the economic terms of gas production “reflect an apparent misunderstanding of the economic realities” of what it takes to build such a project.
During hearings last week before the state’s legislature Brian Wenzel, a vice president at ConocoPhillips, repeated a point from the letter: that the one firm that has advanced in an open bidding process for state incentives to build the pipeline — TransCanada — could face a huge liability. TransCanada was part of a consortium looking to build the project years ago and could face a $9 billion commitment from that effort.
“We’re very concerned about that. It’s definitely a stumbling block for us as we look out there,” Wenzel said, according to the Anchorage Daily News. “We don’t understand how we, as a potential partner of TransCanada . . . could be protected from ending up sharing some portion of that liability.”
Tony Palmer, vice president of Alaska development for TransCanada said the potential $9 billion tab doesn’t apply to the new proposal, however. And even if it does come due, the company won’t add it to tolls shippers pay on the pipeline.
BTW, Conoco is willing to work closely with TransCanada in other ways.
The Anchorage paper has a dedicated section to this process here. There’s also a relatively new blog started on the project by an Aggie working in Alaska

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