More wrangling in Alaska

You may not be surprised to hear that there has been more wrangling over the proposed Alaska natural gas pipeline. Members of the state legislature have begun to disagree with each other and Governor Sarah Palin over the best way of moving the project forward. State house Democrats say that the current proposal offered by TransCanada Corp. could suffer if two of their Republican counterparts continue pushing a measure to probe the progress of the Alaska Gasline Inducement Act (AGIA). Representative Jay Ramras, R-Fairbanks, one of the resolution’s co-sponsors, responded by calling this an “alarmist” tactic. All the resolution’s sponsors say they want are answers on where AGIA stands.

Interestingly, state house Democrats seem to be lining up with the state’s Republican governor, while a handful of state-house Republicans are the ones seemingly challenging the status quo. Recently, Ramras, along with Representative Craig Johnson, R-Anchorage, introduced a resolution asking the administration to review the controversial $500 million in state subsidies that have been granted to TransCanada Corp. in exchange for it pursuing pipeline construction. The sponsors want to know if Alaska is spending half a billion dollars, under AGIA, to spur competition between the state-backed TransCanada project and the BP-ConocoPhillips Denali gas pipeline venture; or if the competition is really being driven by outside economic factors, like Lower 48 shale rock natural gas discoveries. Ramras wants consultants to come back to the table, and the administration to provide a report by October.

According to local media, Governor Sarah Palin agrees that the measure could put the pipeline project in jeopardy. House democrats reiterated the administration’s position, saying that moving forward with the resolution, even though it would not be a law, could kill the pipeline. Representative Les Gara, D-Anchorage, commented that “passing a resolution like this would send a message to anyone who wants to deal with us on a gas pipeline in the future that this state is an unstable place to do business. You can’t change your mind on the biggest project in North America every single time you see a new fact or you come up with a new idea.” Ramras responded by saying that “we are participating in a business transaction with $500 million worth of spit in the game. And it is entirely worthwhile for us to revisit and review at regular increments whether this use of our money is in our best interest.”

“I believe representatives Ramras and Johnson are instructing us to be vigilant in pursuit of this gasline,” Palin said in an official response. “I agree with the premise, but I don’t believe this resolution is necessary, and I certainly don’t agree that there should be an AGIA ‘re-do.’ We expect the oil and gas industry to abide by contracts and agreements they sign with us as they develop our resources, just as they have a right to expect us to abide by our agreements. AGIA is a contract,” the governor went on to say. “Why would we take it off the table, especially in this economy and at a time of great need for energy independence?” If any hope can be gleaned from this ongoing saga, it is that at least some operators maintain an interest in building the pipeline.

Welcome David

You will notice that we have a new contributing editor for our Pipeline Safety Arena column. His name is David Bull, and he comes to PipeLine and Gas Technology with over 30 years of experience in the pipeline safety arena. He is co-founder of ViaData LP, a software publishing firm that publishes regulatory and industry documents in electronic format. Over the years, he has provided consulting, training and risk management services to the natural gas, energy and related industries. He has developed pipeline safety regulations and operator qualification programs for Kuwait Oil Company; created regulatory compliance audits and training programs for major gas, liquid and distribution pipeline operators; and developed “first response” training programs for a major midwestern gas distribution company. With David’s wealth of experience, we are confident that the Pipeline Safety Arena column will continue to be a resource readers can turn to for the latest news and analysis on pipeline safety regulations, management techniques and technologies. Welcome, David!