Special session comes to town

Posted: Friday, June 20, 2008

Alaska's natural gas pipeline legislative road show makes a stop next week on the Kenai Peninsula.

Lawmakers are touring the state gathering public comment about TransCanada Alaska Company's proposal under the Alaska Gasline Inducement Act to build a $30 billion pipeline from the North Slope to Alberta and deliver gas to markets in the Lower 48.

A daylong event is scheduled for the Soldotna Sports Center on Thursday. According to Linda Hay, of the Legislative Budget and Audit Committee staff, the afternoon session from 1 p.m. to 5 p.m. will include presentations by Alaska Development TransCanada Vice President Tony Palmer and Department of Revenue Commissioner Pat Galvin. Sen. Charlie Huggins, R-Wasilla, is expected to chair the meeting.

Hay said Palmer and Galvin generally take questions from lawmakers during this period.

Public testimony will be taken during a two-hour evening session starting at 6 p.m. Peninsula state lawmakers have said they would be present, part of a contingent of perhaps 20 members of the Legislature. Hay said that at this time, that was a "moving number."

Those attending the meeting in Soldotna are likely to here much of what TransCanada has been pitching to lawmakers and others over the past couple of weeks, Hay said.

The Canadian company currently operates some 36,500 miles of gas pipe, including 12,000 miles in the U.S. The proposed project would add another 1,715 miles -- some 750 miles of it in Alaska -- between the North Slope and the Alberta Hub, the largest gas-trading hub in North America.

TransCanada claims among its credentials the expansion of its pipeline system during the 1990s by some 7,000 miles, a project completed on time and within 0.6 percent of its budget.

Now the company is proposing to construct a 48-inch-diameter pipe able to carry 4.5 billion cubic feet of gas per day, which, employing further compression, could be upped to 5.9 billion cubic feet per day. Its present system currently handles 15 billion cubic feet per day.

Assuming Alaska issues TransCanada a license under AGIA this summer, TransCanada predicts a completed "open season" (when gas producers bid for capacity and commit gas to the line) by 2010, and a permit filing with the Federal Energy Regulatory Commission by 2012. If granted a FERC permit by 2014, on-site construction could begin as early as 2016 and be completed by early 2018, with the first gas heading south later that year, the company has said.

The commissioners of the Department of Natural Resources and Department of Revenue have reviewed the TransCanada's proposal and have determined that it likely would attract firm transportation commitments and secure financing.

The commissioners said the project would benefit Alaska in several key ways, including long-term jobs, affordable gas for in-state use, and cash flow to the state.

While TransCanada's proposal is the focus of the Soldotna meeting and the ongoing special session, the rival pipe dream, BP and ConocoPhillips' Denali project, is also likely to be a topic.

The oil companies control trillions of cubic feet of gas and say they wouldn't need the $500 million in seed money promised under AGIA. They've already filed for a preliminary review of their project by the FERC.

The commissioners' review has been critical of the BP/ConocoPhillips idea, saying there are risks for the state, including undefined fiscal concessions the state might have to grant.

Hal Spence can be reached at hspence@ptialaska.net.

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