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Alaska editorial: What will Big Oil do after pipeline bids?

Posted: Sunday, July 08, 2007

This editorial appeared in the Fairbanks Daily News-Miner:

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Oct. 1. That's the date on which Alaskans will know the final list of companies, or consortium of companies, that want to build and operate a North Slope natural gas pipeline under terms laid out by Gov. Sarah Palin and her team.

Applications will come in, it's certain. The Alaska Gasline Port Authority, a voter-created entity that includes the Fairbanks North Star Borough, will apply. And Iowa-based Mid-American Energy Holdings Co. - a company that many believe is the preferred choice of the Palin administration - has indicated it likes AGIA.

But getting a couple of applications doesn't mean Alaska gets a pipeline. What matters, frankly, is the reaction from the companies that hold the leases to the gas. Will BP, ConocoPhillips and Exxon Mobil submit proposals under AGIA? And if not, will they agree to ship the gas through a line built by a third-party if it's not in their best economic interest to do so?

Officials with BP, Conoco Phillips and Exxon Mobil were critical of Gov. Palin's gas plan as it went through the Legislature earlier this year and said their companies wouldn't apply if AGIA went through as is. They were critical after the Legislature passed AGIA largely in the form the governor wanted. And on Tuesday, when the governor and members of her gas team went public with the details of the gas line application, the oil executives were still not embracing AGIA. Maybe the executives with BP, ConocoPhillips and Exxon Mobil have been bluffing. Maybe their companies do plan to submit a pipeline application under AGIA. Maybe AGIA will work.

Maybe.

Critics should be eager to eat crow if the Big Three companies do apply under AGIA or, if the companies don't, they do come to some terms to supply gas to a pipeline built by a third party. Critics should be willing to open wide for a forkful of that crow, because most everyone wants a pipeline to be built. And if a deal that is good for Alaska does come about and does appear likely to lead to that long-sought pipeline, then the Palin critics will need to fall in line.

Oct. 1 will be here soon.

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