JUNEAU -- Alaska's Democratic senator said Wednesday that the state needs to play hardball to make progress toward building a major natural gas pipeline.
U.S.Sen. Mark Begich told The Associated Press that state leaders should tell TransCanada Corp. that the clock is running and it's time to produce results. If the company can't manage, Begich said, the state should tell TransCanada it will look elsewhere for a gas pipeline project. "We shouldn't be sitting around, twiddling our thumbs, saying, 'Well, we'll see how it all works out and we'll check in later with them,' " he said. If the state believes it should have a pipeline project -- as Begich himself believes it should -- then "we should drive that train."
TransCanada is pursuing a pipeline project that would bring gas from Alaska's North Slope to the rest of North America and perhaps overseas markets with the promise of up to $500 million from the state for reimbursable costs. The company is working under terms of the Alaska Gasline Inducement Act, or AGIA, which was championed by then-Gov. Sarah Palin in 2007 as a way to get the ball rolling on a long-hoped-for line.
Some state lawmakers are getting antsy, though most Democrats say the AGIA process should be allowed to unfold. Yet so far, there's been no reportable progress toward reaching agreements with gas shippers in the year since TransCanada announced that it had received bids from "major industry players and others" interested in using its proposed pipeline.
TransCanada has said that it is continuing negotiations, working to resolve issues within its control; it has not given a timeline for how long those talks might run. The company is also awaiting resolution of a long-running lease dispute that could be critical to the project's advancement, and talks between the state and energy companies on long-term tax and royalty terms.
A spokesman said Wednesday that there was nothing new to report.
Begich said a pipeline is Alaska's way forward economically. The state must be more aggressive in pushing the issue, he added.
Begich said the Republican Parnell administration needs to seek settlement over disputed leases on Exxon's Point Thomson gas fields on the North Slope. He said talks need to start on what fiscal terms companies will want as part of a project. And he said the state needs to look at alternative projects capable of moving gas to market.
Gov. Sean Parnell has said he would settle the long- running lease dispute if it's in Alaska's interest to do so. He has said repeatedly that he doesn't plan to talk fiscal terms until there's a project. Parnell has indicated a willingness to see the AGIA process through, though he's also made clear he wants to pursue all options available to the state to commercialize its vast gas resources. That includes approving money for work to continue toward pursuing a smaller gas line for instate use.
Begich believes the future for natural gas is huge and that its price will rise as it will increasingly be seen as a cleaner-burning energy alternative. With higher prices, a large-scale pipeline project becomes more economical.
