Last night Alaska’s House of Representatives voted to award a license to TransCanada to build a natural gas pipeline off the North Slope to the Lower 48. TransCanada had the only proposal accepted under the state’s Alaska Gasline Inducement Act, but it is still seen as in competition with a plan by BP and ConocoPhillips (two of the three major North Slope producers) to build an identical pipeline.
The plan will likely have to be voted on again in the House before going to the Alaska Senate. If approved there it would go before the Commissioners of Natural Resources and Revenue for final approval.
Here’s the Anchorage Daily News’ story, theReuters take on it, and some outtakes from a newsletter sent by Alaska Democrat Mike Doogan , who supports the TransCanada bid:
What a license does
Let’s recap what AGIA does. Passed in May 2007, it sets up a process to get a pipeline built on the state’s terms – the so-called “must haves.” In return, the state commits $500 million and a few other, far less expensive, items of support.
But let me say this: The AGIA law does not – I repeat, not – guarantee a pipeline will be built. Neither will the selection of a licensee. Pipeline construction is at least a 10-year-long process, and many things can happen to derail the project.
So approving a license is a step forward, but just one step.
Now, what about a producer pipeline?
Well, the much-ballyhooed Denali project may be a pipeline construction attempt, but so far it’s been mostly a public relations blitz. That’s not reassuring.
Besides, we’ve been the deal-with-the-producers route, back when Frank Murkowski was governor. They wanted too much. There’s no reason to expect that they want less today. If their pipeline project goes forward, they’ll be back here trying to squeeze more money out of the state, while at the same time refusing to give us at least some of the “must haves.” Their price will make the $500 million look like chump change.
That being said, they can move forward without the state doing anything. Let them. Maybe they will be the ones to build the pipeline. There are things to be concerned about there – basin control, tariff, tax breaks, imported labor – but there will be a pipeline, which is the point of this whole exercise.
It’s not an either-or situation. We can license TC Alaska without doing anything to Denali. And we should. Because there’s no telling what the producers might do – or not do — if we take the pressure off.