House OKs TransCanada plan

Members vote 24-16 to back proposal for pipeline across Canada

Posted: Wednesday, July 23, 2008

The Alaska House of Representatives on Tuesday night handed Gov. Sarah Palin a big victory in her quest for a natural gas pipeline for Alaska.

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Chris Miller / The Associated Press
Chris Miller / The Associated Press

After defeating a series of amendments that would have undermined Palin's Alaska Gasline Inducement Act, members of the Republican-controlled House voted 24-16 to support TransCanada's proposal for a pipeline across Canada to the U.S. Midwest.

"We're very pleased," said Tony Palmer, TransCanada's vice president for Alaska Development, after the vote Tuesday evening. Department of Revenue Commissioner Pat Galvin warned that there was still a crucial Senate vote ahead.

The House action is expected to be finalized this morning, but a vote by the Senate isn't expected until next week.

Under the provision of AGIA, approval is required by Aug. 2, or the deal dies.

With approval, TransCanada will get an exclusive license to develop a pipeline, $500 million from Alaska and requirements that the pipeline would be open to new explorers who find gas on the North Slope.

"The license that's before us is just exactly where we need to go," said Rep. Mike Kelly, R-Fairbanks.

Republican legislators like Kelly were divided on the pipeline, with many backing Majority Leader Rep. Ralph Samuels, R-Anchorage, the only legislator out of 60 who opposed AGIA more than a year ago.

Others, however, have said since they made a mistake voting for AGIA.

"I made a big one there," said Rep. Bob Roses, R-Anchorage, of his vote for AGIA last year. He wound up voting against the deal Tuesday.

That $500 million subsidy was keyed upon by AGIA opponents, many of who have been longtime allies of the state's oil producers. Two of those producers, ConocoPhillips and BP, proposed their own pipeline after AGIA began moving forward.

One ConocoPhillips employee who serves in the legislature, Rep. Kevin Meyer, R-Anchorage, voted for the TransCanada license. He didn't speak during debate, but earlier told the Empire that supporting it couldn't hurt and might help get the state a gas pipeline.

Rep. Gabrielle LeDoux, R-Kodiak, said she wanted an all-Alaska line.

"We give half a billion dollars to a foreign company to ship gas to a foreign country," she said.

Rep. Jay Ramras, R-Fairbanks, was among those opposed.

"This is a giveaway, and we're getting nothing of value in return," Ramras said.

Rep Paul Seaton, R-Homer, said what AGIA's subsidy was buying for the state was an independent pipeline designed to encourage new exploration across the North Slope.

"What we're buying is a basin-opening project," he said.

Rep. Beth Kerttula, D-Juneau, House Minority Leader, said bringing in TransCanada would mean an independent pipeline, not one controlled by the oil producers, such as happened with the trans-Alaska oil pipeline.

"This is the way out of the monopolistic system Alaska has been living under for many years," she said.

Multiple legislators called the TransCanada deal a gamble, but came to different conclusions.

Rep. Wes Keller, R-Wasilla, likened it to a poker game in which the ante was small and the pot was huge.

"There's no way I'm going to fold now," he said, and backed Palin on the deal.

Rep. Mike Hawker, R-Anchorage, said TransCanada didn't have the gas to fill a pipeline, making a deal with the Calgary, Alberta, company too risky.

"Making a gamble is something that I'm very, very uncomfortable with," she said.

He urged a deal with the current oil producers instead, who already hold much of the North Slope's gas under lease but have so far been unwilling to develop it.

Palin came in to office backed by many supporters of an all-Alaska gas pipeline to a liquefied natural gas export terminal at Valdez. She opposed unpopular former Gov. Frank Murkowski's plan to offer the oil companies tax breaks to develop the gas.

Since then, she and many of those who supported that deal have changed their minds about LNG exports, but one who didn't was former Gov. Wally Hickel.

Once a Palin ally, Hickel recently took out advertisements threatening legislators who backed the TransCanada plan.

That may have backfired with Rep. Bob Lynn, R-Anchorage.

"I don't respond well to threats," he said. "Never did. Don't now."

Lynn said the $500 million was an investment by the state in getting it the pipeline it needed.

"Five hundred million is peanuts compared to the billions we'd have been liable for if we'd approved Frank Murkowski's proposal," he said.

Rep. Jay Ramras, R-Fairbanks, gave an impassioned speech calling on the Legislature to abandon the AGIA process, and focus on getting the state's gas to the state's consumers.

"People in the Interior are hurting," he said.

Palin has rolled out her own proposal for in-state gas usage in addition to AGIA, but Ramras called that effort "goofy" and recommended scrapping AGIA and starting over with a new focus.

• Contact reporter Pat Forgey at 586-4816 or e-mail patrick.forgey@juneauempire.com.



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