Alaska editorial: Don't let politics delay decision on gas pipeline plans

Posted: Tuesday, July 08, 2008

When it comes to natural gas pipeline proposals, there are three major players - TransCanada, BP and ConocoPhillips together, and the state of Alaska.

Greatest among them is Alaska.

Alaska is the owner of what is believed to be at least 35 trillion cubic feet of natural gas. The gas is most valuable once it gets to market.

Getting it to market is the state's dilemma.

The Legislature convened in a special session called by Gov. Sarah Palin last month to review the state's options. While the only question to be answered officially is whether to endorse or reject Palin's recommendation that TransCanada be awarded a license designed to lead to pipeline construction, other options exist.

Lawmakers can follow Palin's recommendation; they can reject it and pursue a pipeline with BP and ConocoPhillips; they can tie themselves into political knots of disagreement and fail to move ahead with getting the gas to market.

The latter option is simply unacceptable.

Lawmakers must stay in special session until a pipeline option is chosen, or encourage both TransCanada and the oil companies to move forward with their proposals.

TransCanada proposes a 1,715-mile line from the North Slope to a pipeline hub in Calgary, Alberta, which connects to all major markets on the continent.

It would accept half a billion dollars from Alaska to move its line to construction.

Then TransCanada would need to acquire gas for its line from the oil companies that hold the leases on the natural gas: BP, ConocoPhillips and Exxon Mobile.

BP and Conoco Phillips trotted out a plan, called Denali - The Alaska Gas Pipeline, in April.

It involves building a 2,000-mile line from the North Slope to Alberta, and if necessary, a 1,500-mile line into the Lower 48. The plan already is in motion. It doesn't require a $500 million investment from the state.

The two pipeline proposals exceed the TransAlaska Oil Pipeline in project magnitude. The oil pipeline is 800 miles long.

The state negotiated for several years with oil companies in an effort to get a pipeline built.

Nothing prevented the oil companies from beginning a pipeline years ago.

Neither Alaska, nor the market destined to accept the natural gas, can afford further delays, and the previous delays raise a flag of caution for lawmakers wishing to drive through a plan this summer.

The TransCanada plan isn't without its own flag. Alaskans are concerned about the half-billion-dollar contribution TransCanada requires, asking whether the proposal is a sound investment for the state when it has to contribute that amount.

If the oil companies had started their pipeline project in recent years, they wouldn't find themselves in competition for state support.

And the state likely would be investing its $500 million in other economic projects in Alaska communities.

But the competition exists. It's the competition that finally might get Alaska's natural gas into the Lower 48 where Americans need it. It also needs to be piped into Alaska homes. Alaskans need the line, too - as owners and consumers of natural gas.

Alaskans don't want politics as usual when these plans are considered.

This situation requires looking at the plans objectively, weighing the pros and cons, and choosing the best plan for Alaska and Alaskans.

The Palin administration has worked steadily for the past year and a half toward a pipeline plan.

Those involved aren't economic slouches. Their process and recommendation deserves, and Alaskans demand, a critical and fair review.

Then vote it up or down, but don't leave Alaskans without a pipeline moving toward construction.

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