Source AP ©

Alaska votes for natural gas pipeline project

Alaska lawmakers vote Tuesday on whether to give a Canadian company the green light to pursue a natural gas pipeline project that could unlock 4.5 billion cubic feet (130 million cubic meters) of North Slope gas reserves daily.

The vote by the 40-member Alaska House of Representatives comes as the debate over domestic natural gas and oil production grows increasingly divisive and partisan. The state lawmakers are being closely watched by Alaskans, energy officials in Washington and Ottawa, as well as by industry executives worldwide.

Alaska already sits at the heart of several political energy battles: the potential exploration and production in the Arctic National Wildlife Refuge and offshore drilling in federal waters.

On Tuesday, Alaska's House will vote on whether TransCanada Corp. deserves a license - and with that, as much as $500 million in seed money from the state - to pursue the pipeline project.

Lawmakers in Alaska's House, and then the Senate, are voting whether to support or reject Gov. Sarah Palin's proposal to award TransCanada an exclusive license to pursue federal certification for the 1,715-mile (2,760-kilometer) pipeline.

Awarding a license to TransCanada, however, doesn't guarantee pipeline construction.

The license simply calls for TransCanada to embark on a costly process of pursuing a federal certificate. Under a new law, the license also means the state will help with those startup costs up to $500 million.

Lawmakers said they expect Palin to get the necessary support, but it won't match the support she received when they passed the Alaska Gasline Inducement Act last year - 59-1 between House and Senate.

That new law established bid requirements for those interested in building a pipeline. It was also a law that North Slope leaseholders BP, ConocoPhillips and Exxon Mobil found too restrictive and they never submitted a plan under those guidelines.

But BP and ConocoPhillips did respond in April with their own joint venture, a pipeline project called Denali. The two companies have already filed paperwork for preliminary federal permitting and field work is under way.

But Denali's 12-page plan is routinely criticized as sorely lacking details compared to TransCanada's itemized offering found in three-ring binders the size of two New York City phone directories stacked on top of each other.

Still, TransCanada has its share of critics.

Some lawmakers prefer an in-state pipeline to address the state's soaring energy costs that put Alaska's energy crisis ahead of the nation. They say they can't wait until 2018 for gas to be available to in-state users.

Others question TransCanada's ability to strike a deal with producers BP, ConocoPhillips and Exxon Mobil to ship gas long term. These are called firm transportation commitments and they underpin financing a multibillion dollar pipeline. Without it, there is no pipeline.

Whatever the outcome, the vote will stand as memorable, said House Rules Chairman John Coghill, a 10-year lawmaker whose father, Jack, was one of the state's constitutional framers.

"It's probably one of the more historic votes," he said. "It is historic in that Alaska is linking together with a pipeline company to try to move gas to market."

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