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TransCanada winning over lawmakers

Posted: Sunday, June 08, 2008

The Legislature has scheduled from 30 to 60 days to consider a TransCanada Corp. plan to build a $28 billion gas pipeline.

Some legislators are saying Gov. Sarah Palin's gas line team, along with TransCanada, has already made its case.

"I'd be ready to vote today," said Rep. Beth Kerttula, D-Juneau, House minority leader.

The Legislature is scheduled to conduct more hearings on the application of TransCanada for an exclusive "license" from the state of Alaska to get a $500 million subsidy to develop a pipeline structured to benefit Alaska.

Competing pipeline proposals, including from North Slope producers ConocoPhlllips Co. and BP and the Alaska Gasline Port Authority are also waiting in the wings.

Some top legislative leaders, including House Speaker John Harris, R-Valdez, and Senate President Lyda Green, R-Wasilla, have been skeptical of the Alaska Gasline Inducement Act, under which TransCanada's application was submitted and was the only qualifying application.

The Legislature now has 60 days from the June 3 start of the session to approve the TransCanada proposal.

Key to the legislative shift in support to TransCanada was three days of meetings in Anchorage in which the Palin administration made its pitch.

Following that were three days at the start of the special session in which consultants hired by legislative skeptics also endorsed the project.

"Voting on this license probably won't harm the prospects for this line, and it may strengthen them," said Dan Dickinson, a consultant hired by the Legislative Budget and Audit Committee to review the application.

That committee is chaired by House Majority Leader Ralph Samuels, R-Anchorage, the only legislator to vote against AGIA last year.

Endorsing Dickinson's views were two other LB&A-hired consultants, Barry Pulliam and Lesa Adair.

"I don't personally see harm," Pulliam told the Legislature.

"Granting the license, I can't see how this would hurt," Adair said.

For Sen. Con Bunde, R-Anchorage, that's all he needed to hear.

"If we were on the floor, I'd call the question," he said.

Senate Majority Leader Johnny Ellis, D-Anchorage, said he thinks most legislators have been convinced of the merits of TransCanada's AGIA application, and are now just watching the debate to see if any information comes up that would change their minds.

Samuels said he's still not convinced TransCanada's deal is good for Alaska, and is disappointed that AGIA didn't produce multiple competing applications for the state to chose among.

"We did not get the competition that we were assured would happen," he said.

He said he wanted to be able to negotiate a better deal with TransCanada., instead of the AGIA process in which the state listed its "must haves" and asked for applications for the license.

Commissioner of Natural Resources Tom Irwin disagreed.

"There will always be a little more on the table somewhere," he said.

Irwin negotiated gas pipeline terms with the North Slope gas leaseholders for former Gov. Frank Murkowski, before clashing with Murkowski on how much the state should give away to encourage development of a gas pipeline, and losing his job.

He was brought back by Palin, and says AGIA has this time produced a TransCanada proposal that's good for Alaska.

"Some of the things they offered in the bid, we might not have ever gotten in negotiations," he said.

Irwin said the inducements in Murkowski's plans were $10 billion, compared to $500 million in Palin's proposal.

That shows the financial benefits of Palin's plan over Murkowski's, said Rep. Mike Kelly, R-Fairbanks.

"That's 5 percent of the concessions we were making before," he said.

"That was a ripping good return on (AGIA)" he said.

Some of the TransCanada's opponents in the Legislature are getting increasingly strident in their opposition, as Palin's case strengthens.

Rep. Jay Ramras, R-Fairbanks, has been aggressively questioning administration and TransCanada representatives, and calling their testimony "propaganda."

"This is a fool's errand that we're on," he said.

Ramras questioned whether TransCanada's pipeline was viable without gas that North Slope producers have refused to provide, whether TransCanada was big enough to pull off such a project, and whether the state even needed to spend $500 million to get a pipeline.

Commissioner of Revenue Pat Galvin disputed that TransCanada could not get gas to fill the line.

"The producers have never said they will not commit gas to this project," he said.

Financial Analyst Lesa Adair told the Legislature earlier that TransCanada was big enough and financially healthy enough to do the project.

"It's going to stress anybody who tries to do it, it's a huge project," she said.

Deputy Natural Resources Commissioner Marty Rutherford, head of Palin's gasline team, said the Legislature has already decided to use the subsidy to get elements to the pipeline that it needs.

"That $500 million question was settled when AGIA was passed," she said.

The Legislature will hold three more days of meetings in Juneau, before traveling the state for meetings as far away as Barrow.

Bunde said AGIA opponents now are just trying to delay, hoping to come up with new information that will change minds.

TransCanada's Tony Palmer, vice president for Alaska Development, said his company had hoped to win legislative approval by April, and is already four months behind schedule.

"We've lost four months, but it is four summer months," he said.

The northern construction season is so short, and so important, that is the equivalent of losing 10 months, he said.

A quick decision by the Legislature this summer would not likely help speed up the project, he said.



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